Consumers trying to keep their budgets balanced will be dismayed to find that keeping up with the Joneses is getting pricier as the global middle class expands.
Economists generally consider the middle class to be people with the financial resources to make discretionary and small luxury purchases—from an automobile to concert tickets. By that broad brush, about 2 billion worldwide qualify, said Jack Plunkett, CEO of Plunkett Research.
By 2030, that number will balloon to 5 billion, with many of the newcomers in developing countries such as India, China and Brazil.
Consumer spending in Brazil, Russia, India and China accounted for 8.1 percent of global gross domestic product in 2010, according to IHS Global Insight. It is expected to reach 12 percent by 2015. U.S. consumption as a percentage of GDP peaked at 22 percent in 2002 and is expected to be roughly 14 percent by 2015.
That emerging middle class pushes prices higher, because there are more people vying for resources and products. Rising wages, which help create a middle class, also inflate prices because goods are more expensive to produce, Plunkett said.
"The long-term effect is going to be pretty dramatic," he said.