India is a part of 10 Asian economies which will move past the US in GDP terms by 2030. The group may grow such robustly, on aggregate, and amount to more than $28.35 trillion in real GDP (2010 constant dollars) terms, while for the United States will amount to $22.33 trillion, but a few concerns remain. “We expect Asia-10 to pull ahead of the US by 2030,” DBS report said, but added that this 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. The countries are: China, Hong Kong, India, Indonesia, Malaysia, the Philippines, Singapore, South korea, Taiwan and Thailand.
Here are three major concerns:
The rise of protectionism may reduce investment flow in the region as Asia is one off the most externally exposed regions. The trade conflict may have a substantial impact on the outlook of the Asian economy, DBS said.
DBS report also said that the Asian countries may have benefited in the past from the demographic dividend, but it’s not such 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 aging countries like Singapore, Japan and China may be able to offset the demographic drag through the active use of new technology,” the report said.
Source : Times of India