Contrary to popular belief, the poorest people of the world could be the driving force for future global growth and for the largest-ever consumer market, according to Bank of America Merrill Lynch.

In its latest thematic investing report, Moving on Up – Bottom Billions Primer,  BofA Merrill Lynch analysts write that 3 billion of the world’s poorest 4.5 billion people could be joining the middle class by around 2030, creating “the biggest growth story since the post World War II boom.”

Middle-class spending could more than double from $21 trillion currently to $56 trillion by 2030 and $84 trillion by 2050, creating investment opportunities in four key areas: consumer goods and services, information and communication technologies (ICT), financials and health care, according to the report.

It lists 250 stocks that are likely to benefit from this transformation when billions of people move from poverty into the middle class, and rates them low, medium and high for exposure to this theme. Most of the companies are based in emerging markets and those with the highest ratings are primarily in India, South Africa and Indonesia, but there are a few top-rated companies based in Norway and Spain.

BofA Merrill Lynch analysts note that this is a long-term outlook and that the 2016 economic outlook for emerging markets is weak, with the bottom billions “at the heart of the world’s top risks.” They urge  “governments, businesses and stakeholders to act together to tackle growing inequality (poorest 20% receive 6% income vs. richest quintile attracting 50%), social unrest and instability, which is reaching highs of the 1980s.”

Currently the world’s poorest people earn the equivalent of only $1 to $10 per capita per day, but cumulatively they have $5 trillion in purchasing power and $7.4 trillion in wealth, according to the report. Although that may sound like a lot, $5 trillion is less than a third of annual U.S. GDP.

When the world’s poorest people begin to earn the equivalent of more than $10 per capita per day ($3,000 to $6,000 per year), that will be the “economic sweet spot” for businesses and investors, according to the report. Only then will the world’s poor join the “low, lower-middle and middle-middle class” and be able to “sustain sales of goods and services.”

In the meantime the bottom billions have enormous economic potential, according to the report. They are young (60% are less than 30 years old), urban, connected (2 billion use the Internet), expected to finish 12 years of schooling and have more disposable income than ever before. 

“In a world starved for growth, we believe that the answer lies in uplifting the 4.5 billion people at the base of the economic pyramid,” write the authors.

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