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Income and Expenditure in Middle East and Africa

October 2022

Fast economic development in the Middle East and Africa region is unlocking high levels of unmet potential and resulting in diminishing regional disparities and rapid growth in consumer incomes. Nevertheless, income inequality is set to increase in most of the countries, and the lowest-income class is set to remain the fastest-growing income segment. The short-term outlook is also clouded by rising energy and food prices, inducing malnutrition among the most vulnerable populations.

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Key Findings

Disposable income to almost double, yet short-term outlook poses challenges

Total disposable income in Middle East and Africa is set to almost double by 2040, driven by economic diversification efforts within oil-dependent countries, as well as rising agricultural productivity and a shift towards higher-value-added sectors in sub-Saharan Africa. Nevertheless, the short-term outlook remains clouded by rising inflation and the tightening of global financing conditions, constraining discretionary spending and exacerbating food insecurity, especially in the Horn of Africa.

Lowest-income class set to witness the most rapid growth

Due to prevalent poverty, expenditure on essentials is set to account for more than 60% of the total consumer basket in 2040. The lowest-income class (social class E) is expanding in 17 out of 20 regional countries, with half of the population living on less than USD5,000 per year in 13 out of 20 countries.

Large-scale gender income gap set to persist

Huge disparities between male and female per capita incomes are set to prevail through to 2040, resulting from low workforce enrolment rates among females, especially in Middle East and North Africa (MENA). However, the governments are expected to continue with the implementation of economic diversification reforms, increasing opportunities for female empowerment.

Silver consumers to record the fastest growth in average gross income

The consumer segment aged 60+ years is expected to record the steepest average gross income growth over the forecast period, in line with the global trend towards ageing wealth. Accumulated wealth and improving social protection stand among the major income growth drivers. The number of silver consumers is set to continue growing rapidly through to 2040, supporting demand for healthcare products and services, as well as leisure activities tailored for seniors.

Scope
Key findings
Disposable income to almost double, yet short-term outlook poses challenges
Rapidly growing fintech sector to support accumulation of consumer savings
Low female employment rate in MENA to sustain a large per capita income gap
Rising inflation to undermine the short-term consumer market outlook
Soaring food prices to aggravate hunger in Africa
Hotels and catering to witness the fastest growth due to rising urbanisation
Middle East and Africa to remain fragmented in terms of household expenditure
Number of singletons is growing rapidly, yet demand for family goods to remain high
Seniors to record the fastest income growth
Uneven growth across economic sectors to exacerbate income inequality
Lowest earners are the most prevalent, yet upskilling initiatives aim to foster income growth
Lack of infrastructure and employment opportunities lead to large income disparities
Growing access to mobile remittance services expected to mitigate the urban/rural gap
Algeria: Share of income and wealth of the middle segment
Algeria: Middle-income households
Algeria: Essential spending by middle-income households
Bahrain : Share of income and wealth of the middle segment
Bahrain : Middle-income households
Bahrain : Essential spending by middle-income households
Cameroon: Share of income and wealth of the middle segment
Cameroon: Middle-income households
Cameroon: Essential spending by middle-income households
Egypt : Share of income and wealth of the middle segment
Egypt : Middle-income households
Egypt : Essential spending by middle-income households
Iran : Share of income and wealth of the middle segment
Iran : Middle-income households
Iran : Essential spending by middle-income households
Israel : Share of income and wealth of the middle segment
Israel : Middle-income households
Israel : Essential spending by middle-income households
Jordan : Share of income and wealth of the middle segment
Jordan: Middle-income households
Jordan: Essential spending by middle-income households
Kenya: Share of income and wealth of the middle segment
Kenya: Middle-income households
Kenya: Essential spending by middle-income households
Kuwait: Share of income and wealth of the middle segment
Kuwait: Middle-income households
Kuwait: Essential spending by middle-income households
Morocco: Share of income and wealth of the middle segment
Morocco : Middle-income households
Morocco: Essential spending by middle-income households
Nigeria : Share of income and wealth of the middle segment
Nigeria : Middle-income households
Nigeria : Essential spending by middle-income households
Qatar : Share of income and wealth of the middle segment
Qatar : Middle-income households
Qatar: Essential spending by middle-income households
Saudi Arabia : Share of income and wealth of the middle segment
Saudi Arabia : Middle-income households
Saudi Arabia : Essential spending by middle-income households
South Africa : Share of income and wealth of the middle segment
South Africa : Middle-income households
South Africa : Essential spending by middle-income households
Tunisia : Share of income and wealth of the middle segment
Tunisia : Middle-income households
Tunisia : Essential spending by middle-income households
United Arab Emirates : Share of income and wealth of the middle segment
United Arab Emirates : Middle-income households
United Arab Emirates : Essential spending by middle-income households
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