Asia: An Epicenter of Global Growth
One of the most dramatic developments in the last 30 years has been the soaring consumption in Asia and its integration into global trade, capital, talent and innovation. In 2000, Asia accounted for just under one-third of the global GDP and is on track to top 50% of the global GDP by 2040 and drive 40% of the world's consumption, representing a significant shift in the center of activity of the world. Having said that, the Emerging Asia's GDP growth is expected to significantly weaken from 5.5% in 2019 to 1.0% in 2020 in-line with the global weakness mainly caused due to COVID-19 pandemic. Yet, the long term structural drivers remain intact.
The Asia-Pacific region will be responsible for an overwhelming majority (90%) of the 2.4 billion new members of the middle class entering the global economy. The bulk of that growth will come from the developing markets of China, India and throughout South-East Asia. Asia is making significant economic progress and rapid strides in human development in terms of life span, literacy and even internet usage and lifestyle standards. Millions have been lifted out of poverty and living standards improved across income levels.
China, which has been a global powerhouse is expected to see its growth slipping drastically from 6.1% in 2019 to 1.2% in 2020 and if conditions get worse, growth will sink to 0.1% that is almost no growth essentially on the back of significant damage done by the COVID-19 outbreak after a nearly two-month suspension of all non-essential business activity was imposed by authorities. However, the short-term effects of the coronavirus pandemic do not affect China’s long-term growth prospects, as the country's economic fundamentals remain unchanged.