Global economic growth has been modest since the outbreak of the war in Ukraine and a surge in inflation in 2022. Although the outlook has started to brighten recently, ongoing tightened financial conditions and persisting geopolitical risks put a limit on the global recovery. Despite the global challenges, some emerging economies, particularly those from Asia Pacific, are expected to sustain solid growth rates and lead the global economic expansion in 2024 and beyond.
Out of the world’s 62 major economies in Euromonitor International’s Macro Model, five emerging Asian countries are expected to have the highest real GDP growth rates in 2024: India, the Philippines, Vietnam, Indonesia and China.
India’s economy is expected to grow by 6.7% in 2024, the highest rate among the world’s key economies. Growth will be fuelled by a positive trajectory in fixed investment, on the back of sustained government capital expenditure, as well as improving private investment.
Despite a challenging global environment, recent improvements in India’s business environment, structural reforms and the ongoing diversification of global supply chains are the major drivers behind the country’s strong investment path.
Going forward, the Indian economy will continue to benefit from its youthful demographics, an expanding middle class, and its technological innovation capacity, as well as a deeper integration into the global value chains. The key challenges facing the economy are creating enough jobs for its abundant workforce and addressing its existing vulnerabilities, which include fragile energy and food security and intensifying climate change risk.
Economic growth is expected to accelerate in the Philippines in 2024, on the back of stronger public investment and improving exports and domestic demand amid moderating inflation. In addition, the ongoing rebound in tourism and sustained remittance inflows will provide additional support to the services sector and household spending.
On the downside, the highest interest rates in 17 years will continue to dampen investment. Also, the Philippines’ growth outlook could be challenged by a sharper slowdown in major advanced economies, heightened geopolitical tensions and extreme weather events that could result in inflationary pressures and lower demand for the country’s exports.
Vietnam: Booming FDI inflows amid global economic fragmentation
In 2024, economic expansion in Vietnam is set to gain momentum, with its real GDP growth rate expected to reach 5.8%, up from 4.9% in 2023. This will be driven by sustained demand for the country’s exports, positive inflows of foreign direct investments (FDI), and ongoing public investment. However, the country’s export-led growth model also means it remains vulnerable to external shocks.
In the long run, Vietnam will continue to be a bright economic spot and a rising destination for investment in Asia Pacific given its dynamic export manufacturing sector, growing tech industry and rapidly expanding middle class
With a youthful and educated workforce, favourable trade and investment policies and a strategic location at the crossroads of global trade routes, the country is set to benefit from the global supply chain diversification trend as companies seek to reduce their dependence on China.
Indonesia: Stable growth supported by increasing global electronics demand
As the commodity boom waned in 2023, economic growth in Indonesia has been driven primarily by strong domestic consumption and robust public investment. The new administration led by President-elect Prabowo Subianto, which will take office in October 2024, will likely maintain a focus on infrastructure development to support economic growth.
An anticipated upturn in the global electronics demand and reviving travel flows will also bolster Indonesia’s exports in the short and medium term
The Indonesian economy is therefore on course to maintain its growth momentum in 2024, with its real GDP growth rate expected to remain stable at around 5.0%, the same level as in 2023.
China: Remaining a key contributor to global economic growth
Despite many challenges, the world’s second largest economy will still record one of the world’s fastest growth rates in 2024, driven by improvements in industrial activity and exports on the back of resilient external demand. More government spending is also planned for 2024, which will help to boost economic activity. However, a property slump and subdued private consumption will continue to be constraints for China’s economic expansion in 2024.
While China will remain a key contributor to global economic growth, the country’s long-term growth prospects are challenged by its ageing population, its relatively low productivity growth, and an ongoing economic decoupling from China.
Expected to account for 48% of global economic growth in 2024, the Asia Pacific region with its fast-growing economies and burgeoning consumer markets continues to serve as a key engine for the global economy, providing vast growth opportunities for both B2B and B2C businesses.
Learn more about the global economic prospects in our free report, Global Economic Forecasts: 2024 Outlook – Mid-year Update.