Asia's Path to 2030
- China's economy will undergo a difficult phase
Asian Economic Forecasting Team
Economic Prospects in China and ASEAN4
The Japan Center for Economic Research released its first Medium-Term Asian Economic Forecast for 2016 through 2030.
With labor, capital investment, and productivity growth decelerating, the growth rate in China will decline to a level below 3% in 2030. Income per capita will barely miss the level for a high-income country in 2030. There are huge issues around reducing excess capacity and excess debt.
The growth rate in Malaysia will decline due to a slowdown in the labor force, with average growth of around 3.5% for the period 2026-30. Although the country will enter the ranks of high-income nations in the late 2020s, reforms such as upgrading the industrial structure are vital for further growth.
In the context of a rapidly aging society and a low birthrate, the average Thai growth rate for the period 2026-30 will be the lowest among the ASEAN4 at 2.6%. Income per capita is under pressure from both the Philippines and Indonesia. Labor costs are rising and manufacturing industry competitiveness is declining, but tourism and other service exports are expanding.
With an average growth rate at 5.3% for the period 2026-30, the Philippines will have the highest growth among the ASEAN4. The expanding labor force and capital stock are contributors. Business Process Outsourcing (BPO) will heighten its presence as the engine driving the economy.
Due to labor force and capital stock growth, Indonesia is expected to see average growth rates of around 5% during the 2020s. Whether or not the country can revitalize its declining manufacturing industry is an important point. If the reforms are delayed, there is potential for the growth rate to take a downward turn.
Our Asian Economic Forecast was posted on the Nikkei Asian Review (28/September/16)
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