The next bn: Gen Z and the middle class driving CEMEA's growth

With the world’s population soaring past 8 bn, Gen Z is shaping the future economic outlook. Fueled by a growing middle class, the demographics of Central and Eastern Europe, Middle East and Africa (CEMEA) are set for new opportunities.

Globally and regionally, economic outlooks signal a quicker slowdown in spending. In CEMEA, Sub-Saharan Africa (SSA) faces currency pressures, with South Africa, Ghana and Nigeria slipping against the dollar. North Africa, the Levant and Pakistan (NALP) are struggling with cost-of-living challenges and high inflation, especially in Egypt and Pakistan. However, the Commonwealth of Independent States and South and Eastern Europe (CISSEE) are seeing recovery, with Ukraine’s rebound contributing to a second consecutive year of economic growth in 2024. The Gulf Cooperation Council (GCC) benefits from elevated energy prices and thriving inbound tourism.

Two key demographics will drive long-term growth; a rising Gen Z, who, along with millennials, make up over half the world’s population, and the middle class, which constitutes almost two-thirds of total private consumption.

As Gen Z fuels future growth, CEMEA stands to gain. Gen Z’s spending share is set to double every five years, skyrocketing from 4% in 2022 to 23% by 2035, marking the sole significant spending boost among generations.

Without a current Gen Z strategy, you're losing share, interest, and relevance. The generation prioritizes entrepreneurship, financial focus, cultural pride and digital literacy, with social media shaping their attitudes and interests. Gen Z values seamless digital payment solutions and brands that build engaging customer communities. Falling in line with that desire for a personalized experience, convenience and control of payments are also crucial.

CEMEA benefits from its growing middle class, alongside its Gen Z cohort. By 2030, Africa and the Middle East will see rapid middle-class growth — 43% and 39%, respectively. With a large youth population and shifting working-age demographics, domestic spending will rise, reflecting trends in Europe and North America, as more middle-class households tap into electronics, appliances, and travel.

In the long run, these demographics are vital. By 2026, one in four Gen-Zers will be in CEMEA, versus one in ten in North America and one in five in Europe. CEMEA will, as a result, fuel a larger share of growth in real personal consumption until 2035, positioning it for further growth as opposed to countries supported by a rising middle class. This region is primed to seize the opportunities ahead.