India, 9 other Asian nations to pip US in GDP terms by 2030, but these 3 key concerns remain : 23-07-2018

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:

Trade war:

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.

Demographic dividend:

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.

Employment

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

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