New Delhi [India], November 14 : Economies like India are set to drive the next wave of Asia's growth as the China's contribution to the region's growth is set to decline, highlighted a report by Morgan Stanley.
The report noted that India, along with other emerging Southeast Asian economies like Indonesia, the Philippines, and Malaysia, will lead the next wave of growth in Asia.
It said "In the next wave of Asia's growth, we believe it will be the economies of India, Indonesia, the Philippines and Malaysia that will help drive growth forward..... whilst China's relative contribution will decline".
According to the report, these four economies are expected to collectively account for 53 per cent of Asia's nominal GDP growth through 2027, a significant rise from 33 per cent in the pre-COVID years. This shift comes as demographic changes, policy priorities, and geopolitical factors reshape the region's economic landscape.
The report also noted that Asia's economic size has grown tremendously over the past few decades, with its USD nominal GDP rising from just USD 2.1 trillion in 1980 to an estimated USD 34 trillion in 2024.
The report projects this will reach USD 39 trillion by 2027, making Asia the fastest-growing major economic region globally. However, while the region will maintain a rapid growth rate, its pace may slow compared to its historical record.
This shift in growth drivers reflects changing demographics and evolving government policies. As China's population ages and its economy shifts away from rapid growth, younger, high-growth economies in Asia are taking on a larger role. India, Indonesia, the Philippines, and Malaysia benefit from favorable demographic trends and policies focused on economic expansion, which are attracting both domestic and international investment.
It said "While the overall saving to GDP will remain high, we see a shift towards financial market instruments versus traditional savings vehicles, such as bank deposits, property or precious metals".
The report highlighted a rebalancing of economic power within Asia, with India and Southeast Asian nations emerging as major growth drivers as China's influence lessens.
This transformation is driven by demographic factors, policy shifts, and evolving financial trends, positioning Asia's dynamic economies for a strong future on the global stage.
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