10 major economies of Asia to surpass US in terms of GDP by 2030

New Delhi: The 10 major economies of Asia, including India, are expected to see robust growth and amount to over $28 trillion in real GDP (gross domestic product) terms on aggregate, more than the US by 2030, says a DBS report.

According to DBS the Asia-10 economies are Chi­na, Hong Kong, India, Ind­o­n­esia, Malaysia, the Ph­il­ipp­i­n­es, Singapore, South Ko­rea, Taiwan, and Thailand.

By 2030, Asia-10 eco­nomies will grow so robustly that they will, on aggregate, amount to over $28.35 trillion in real GDP (2010 constant dollars) terms, while for the United States will amount to $22.33 trillion.

“We expect Asia-10 to pull ahead of the US by 2030,” DBS said. But it neither is a sufficient nor a necessary condition to invest in Asia, as investing cannot be based on a single indicator, especially when it comes to a long-term horizon, it said.

According to the global financial services major, Asia has a bright economic fut­u­re, however, all Asian econ­omies face some common issues – climate change, rising inequality, worsening environment for trade, and technological disruption that can drag growth numbers.

“Several dynamics that have supported the economic development of the Asian economies in recent deca­d­es are weakening, and there are many changes in the international environment,” DBS said in a research note.

The report said the demographic dividend that many Asian countries benefited from in the past might not be as valuable now.

A young population creates a “challenge” in terms of generating jobs, in absence of which there will be high levels of unemployment, creating both an economic and social/political challenge, the report noted.

“Countries like India and the Philippines will need to work hard to create employment for its young population; while ageing countries like Singapore, Japan and China may be able to offset the demographic drag thro­ugh the active use of new technology,” the report said.

Moreover, rising protectionism by global economies will act as a threat for investment flows into Asia.

“There is real potential for trade protectionism to emerge, which would reduce trade and investment flows in the region,” DBS said adding Asia is one of the most externally exposed regions in the world, and trade conflict would have a meaningful economic impact on the Asian economic outlook.

Earlier, the Asian Development Bank (ADB) said on Thursday that growth in Asia and the Pacific’s developing economies for 2018 and 2019 will remain solid as it continues apace across the region, despite rising tensi­ons between the US and its trading partners

But the rise in protectionist trade measures from the US and countermeasures fr­om China and other countries “poses a clear do­wnside risk to the outlook for developing Asia”, ADB said.

The Asian development outlook supplement has factored in the tariffs imposed by July 15.

“The risk of further ratc­h­e­ting up of protectionist me­asures could undermine consumer and bu­siness confidence and thus developing Asia’s growth prospects,” ADB said.