The World’s Biggest Economies Shifting to Asia

In BICSI Blog, BICSI Bytes, Featured, Newsby info@bicsi.com.au

A recent Statista report highlighted the shift in national financial stature to our neighbours in Indonesia, China, India, Malaysia and the Philippines. This has a significant impact on many BICSI members based in Australia and New Zealand, whose responsibilities involve South East Asia.

According to data from the World Bank and IMF, Asian countries are expected to make up most of the top-5 countries in the world by size of GDP in 2024, relegating European economic powerhouses to lower ranks.

China’s economic growth has been steep since the 1990s, while India and Indonesia have even more recently entered the top 10 of the biggest economies in the world and are expected to reach ranks 3 and 5 respectively by 2024. Japan, an established economy, is expected to cling on to rank 4 in 2024.

Asia’s burgeoning middle class is one of the reasons for the continental shift in GDP. While China has been the posterchild of market growth in the 21st century so far, the country is expected to tackle an ageing population further down the line, which will put a damper on consumption. Indonesia, together with the Philippines and Malaysia, are expected to grow their labour forces significantly in the years to come, contributing to a rise in average disposable incomes, according to the World Economic Forum.

Asian multinationals, like China’s Huawei and India’s Tata, have already emerged in this century, and more are expected to appear on the global scene. But rapid growth in Asia also comes with its own set of problems, like a quickly growing divide between rural and urban incomes, environmental degradation and new challenges for governance and institutions, according to the FAO.