Speaking at an industry event yesterday, CBA chief economist Michael Blythe said we are in the midst of a period in which the number of middle-income consumers in the world will increase from about half a billion to 1.7 billion by 2020.
“So we are talking about a huge increase in the number of people with money to spend,” Mr Blythe said, adding that the combination of income and demographics is very powerful.
Mr Blythe dismissed fears about the slowdown in China’s economic growth, explaining that the nation's economic rebalance presents Australia with an opportunity to exploit the “fourth boom” in consumer services.
“The critical figure to take away here is that 7 per cent growth in China will have the same impact as those 10 per cent-plus numbers we got in earlier years in terms of driving the global economy and demand for our commodities,” he said.
“By 2020, we predict the growth number for China will be around 5 per cent.”
The type of growth behind those lower numbers is also going to change, Mr Blythe said.
“We are going to see a shift, if you like, in what is driving growth in China, from that industrial focus more to one that focuses on the consumer and services part of things,” he said.
“This is why I say there is potentially a fourth boom out there for Australia.”
