| Middle Class and Expenditure in Nepal | |||
| HH Survey 2004/05 (means, 2005 PPP$) – per day | % of population | Total population (million) | Annual expenditure (billion) |
| $2-$4 | 16.74 | 4.45 | 4.32 |
| $4-$10 | 5.3 | 1.41 | 2.91 |
| $10-$20 | 0.85 | 0.23 | 1.09 |
| Total | 22.89 | 6.09 | 8.32 |
| $20 plus | 0.38 | 0.1 | 2.4 |
| Middle class is defined as those earning between $2 and $20 (2005 PPP$) | |||
| Source: ADB 2010, p.46 | |||
The latest ADB’s report (Key Indicators for Asia and the Pacific 2010) states that total annual expenditure of middle class (defined as having income between $2 and $20 per day at 2005 PPP$-- whose number is 6.09 million) is around US$8.32 billion. This is approximately 27 percent of total value of goods and services produced in the country (i.e. gross domestic product -- GDP). In Nepal, total consumption level is above 90% of GDP. Private consumption is close to 80% of GDP. The data are derived from household survey done in 2004/05. The figures should have increased substantially as remittances has increased drastically since five years back. I wonder how someone earning $2 a day falls under middle class. These people are hardly above the global poverty line. The authors of the report might have taken the lower bound of middle class projections/definitions in literature. But, this does not give the true economic strength and potential of the middle class. Anyway, the above figures give an indication of a rough estimate of the market strength of Nepali middle class.
