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Peru's middle class grew 4.5% to 14.4 million in 2018

14:34 | Lima, May. 15.

The GDP growth rate of 4.0% and the poverty reduction to 20.5% in 2018 contributed to the consolidation of the middle class, which grew 4.5% to 14.4 million Peruvians —44.7% of the population— compared to 2017, the Lima Chamber of Commerce (CCL) said Wednesday.

"In 2018, a total of 618,797 Peruvian nationals joined this segment. Their incomes range between US$10 and US$50 a day, measured on a purchasing power parity (PPP) basis, which is equivalent to a monthly income of between S/1,942 (US$584) and S/9,709 (US$2,920)," said Cesar Peñaranda, executive director at CCL's Institute of Economics and Business Development (IEDEP).

This growth began in 2004, when the Peruvian middle class represented a mere 17.1% of the total population and, after 10 years, the rate rose over 40%, remaining above this ratio since then.

"The progress of the middle class is one of the most significant achievements of sustained economic growth, at the same level as global and extreme poverty reduction," he commented.

The middle class size is key as it supports economic growth, encouraging higher consumption of goods and services, creating greater entrepreneurial initiatives, and contributing to social order.

According to IEDEP, the middle class splits into two groups: the lower middle class, whose income per capita lies between US$10 to US$20 per day, and the upper middle class, whose daily income ranges from US$21 to US$50.

The lower middle class consists of 9.4 million Peruvians, while the remaining 5 million are classified as upper middle class, making up 34.5% of the middle social strata.

"This last segment sparks commercial interest given the purchasing power and savings capacity of households. A characteristic of middle-class individuals is that they are less likely to be affected by crisis or external shocks," Peñaranda stated.

(END) RGP/RMB/MVB

Published: 5/15/2019
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