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Growth Rates In Asian Economies Most Rapid In The World

Monday, July 20, 2015
By Dominic Rebello

An analytical insight into how a variety of political and economic factors can affect business in individual countries and across Asia, by the Economist Intelligence Unit’s Market Outlook reveals that at the moment Asia is the only economic region recording fast rates of growth. With China standing as the second largest economy in the world and the establishment of the Asian Infrastructure Investment Bank (AIIB), business opportunities across the whole region are steadily rising. And now more than ever, believes the Economist ‘it is important for organisations to filter out the noise and stay on top of the most important developments’

The current growth rates in Asian economies are the most rapid in the world, with an increase in innovation, vital infrastructure developments and younger populations than Europe and the US; Asia is steadily becoming the most attractive region for business opportunities, says a just released report by the . Economist Intelligence Unit’s market outlook for some of Asia’s most influential and fastest growing economies: India, China, Indonesia and Philippines.

According to the report, the growing middle class offers potential for manufacturers. It believes rising income levels mean that India’s huge population of around 1.2bn is becoming an increasingly important market for consumer goods, and this trend will continue during the forecast period. Private consumption expenditure will rise from US$1trn in fiscal year 2013/14 (April-March) to US$2.4trillion in 2018/19.

The majority of people will continue to be preoccupied with meeting their basic daily needs rather than following the latest consumer trends. However, the presence of a large number of middle-class households offers considerable potential for manufacturers and retailers.

The rapid growth in personal incomes, combined with a more open domestic market, will make India an increasingly attractive market for foreign companies.

Nevertheless, India remains a predominantly agricultural society and is home to around 40% of the world’s poorest people. Moreover, even the middle classes have limited disposable incomes. Demand for large and even medium-sized cars is still limited. Higher-quality products certainly appeal to the country’s consumers, but price remains the main determinant of the level of demand. Unreliable and limited supplies of water and electricity have forced foreign manufacturers of white goods to rethink their approach—for example, by designing smaller and more efficient washing machines and refrigerators.

As regards China, Indonesia and Philippines, the Economist Intelligence Unit believes, rising incomes will present opportunities in 2015-19 for China. Foreign companies continue to be attracted by the opportunities offered by China’s large and growing economy. China has a population of over 1.3bn, and annual GDP is likely to grow to over US$15trn (measured at market exchange rates) by 2019.

For Indonesia it believes Indonesians will become wealthier faster than their peers as Indonesia remains an attractive market in a variety of sectors, particularly given the country’s fairly consistent economic performance since 2008, despite a tumultuous time for the global economy.

For Philippines, it says” Despite its medium-sized population of just over 100m, the Philippines is a small market, with GDP per head estimated at only US$2,843 at market exchange rates and US$6,914 at purchasing power parity rates in 2014. GDP per head will continue to rise in 2015-19, reaching US$4,549 at market exchange rates by the end of the forecast period”.

Clearly, the revelation is that Asian countries will continue to witness good times ahead!

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