Asia’s economy has been regarded as the world’s growth engine. Due to several optimal growth factors, it accounts for 62 per cent of global GDP growth with an estimated 8.5 per cent CAGR over the next three years. Now may be the time for forward-thinking businesses to engage with China, Japan, and other APAC markets.
What did 2018 show us and what is 2019 bringing?
GDP growth in Emerging Asia – namely, Southeast Asia, China, and India – held up in 2018 in spite of external and domestic headwinds. In 2018, Asia, excluding Japan, grew by 6.2 per cent while China’s economic growth dropped from 6.8 to 6.6 per cent. Japan, a more mature and developed economy, grew just under 1.0 per cent YoY.
The economic outlook for the Asia Pacific region is strong, and it remains perhaps the most dynamic part of the global economy. Near-term prospects have improved since 2017 and risks around the forecast are currently balanced. While there may be some downside in the medium term which needs to be monitored, such as tightening of global financial conditions, a shift towards protectionist policies and an increase in geopolitical tensions, micro-economic growth opportunities continue. Furthermore, GDP growth for Asia is forecast at 5.9 per cent for 2019, compared to 1.4 per cent for Eurozone.
What is to come?
Long-term growth prospects for Asia will be affected by demographics, with the slowing down of productivity growth being offset by the rise of consumption and the digital economy. Asia is set to embrace the digital revolution, which will only help them stay competitive, globally, and continue to grow their share of global GDP.
GDP in Emerging Asia is set to grow by an annual average of 6.1 per cent in 2019 – 2023. Domestic demand is expected to sustain momentum, though trade is facing some uncertain prospects as we see tariff measures broaden. China is forecast to have an average growth of 5.9 per cent in 2019 through 2023. However, investment and government spending will likely offset any weaknesses in trade.
What does all this mean for brands across the world? Chinese and broader APAC consumers are only going to continue to grow in their importance and drive revenue. Organizations that are positioned effectively over the coming years will embrace these trends and ensure that pivoting towards Asia is a major part of their growth strategies.