According to the World’s Economic Forum, By 2020, Asia’s GDP will overtake the GDP of the rest of the world combined. While by 2030, the region is expected to contribute roughly 60% of global growth.
In 2020, this will be the first time since the 19th century, Asian economies will become larger than the rest of the world combined in terms of purchasing power parity (PPP). The rise in Asia’s middle class also helps to increase in PPP, the size of this group currently stands at 500 million to 1.75 billion by 2020 This indicates that Asia is growing richer and it becomes more integrated as a constructive force for global governance.
A recent study by the World Bank estimated that if fully implemented, Belt and Road initiative (BRI) transport projects could increase trade between 1.7% and 6.2% in 2023 for the world. It will increase global real income by 0.7%to 2.9% and helping to lift 7.6 million people from extreme poverty in the process.
China will remain the engine of economic growth for Asia and the world. According to IMF projections by 2023, China’s contribution to global growth will rise to over 28%.
According to the International Monetary Fund (IMF), The Indian economy will grow sharply in recent quarters from 6.1% in the fiscal year 2019 to 7% in 2020, supported by announced corporate income tax reduction and recent monetary policies.
However, Japan’s economy is projected to expand at a moderate pace in line with potential growth (0.9% in 2019 and 0.5% in 2020). A recent hike in consumption tax by the government will help the Japanese economy as temporary fiscal support.
The economic growth of ASEAN-5 countries (Indonesia, Malaysia, Philippines, Singapore, and Thailand) have lost some momentum in the first half of 2019 as weak external demand is seen in recent times. Looking ahead, growth is expected to stabilize around the 4 to 5% level.
If all these micro and macroeconomic factors are taken into account Asia’s GDP, it will overtake the GDP of the rest of the world over the next decade. The rise of the Asian economy will help to regain its former glory and will make it an economic powerhouse of the world again.