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Economies in Asia to dominate 7% growth club in 2020s

Singapore

THE 2020s are set to be the Asian decade, with the continent dominating an exclusive list of economies expected to sustain growth rates of around 7 per cent.

India, Bangladesh, Vietnam, Myanmar and the Philippines should all meet that benchmark, according to a research note on Sunday from Madhur Jha, Standard Chartered's India-based head of thematic research, and global chief economist David Mann. Ethiopia and Côte d'Ivoire are also likely to reach the 7 per cent growth pace, which typically means a doubling of gross domestic product every 10 years. That'll be a boon to per-capita incomes, with Vietnam's soaring to US$10,400 in 2030 from about US$2,500 last year, they reckon.

The South Asian group members should be GDP standouts as they'll together account for about one-fifth of the world's population by 2030. The demographic dividend will be a boon for India, while Bangladesh's investments in health and education should juice productivity.

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The Asian dominance of the list is a change from 2010, when the bank first started tracking the economies it expected to grow by around 7 per cent. Back then, there were 10 members evenly split between Asia and Africa: China, India, Indonesia, Bangladesh, Vietnam, Nigeria, Ethiopia, Tanzania, Uganda, and Mozambique.

China is a notable absence from the latest ranking after being a member of the club for almost four decades - reflecting both a slowdown in economic growth and a progression towards higher per-capita incomes that makes faster growth rates more difficult to sustain. Standard Chartered estimates the world's No 2 economy will keep up a 5.5 per cent economic growth pace in the 2020s.

Sub-Saharan African countries also have faded, which the analysts attribute to "waning reform momentum, despite a slowdown in commodity prices". While faster economic growth isn't a panacea - think income inequality, crime, pollution - it tends to come with a lot of positive knock-on effects, the duo wrote.

"Faster growth not only helps to lift people more quickly out of absolute poverty, but is also usually accompanied by better health and education, as well as a wider range of - and better access to - goods and services," they say in the report. "Higher incomes resulting from faster growth also usually reduce socio-political instability and make it easier to introduce structural reforms, creating a virtuous cycle." BLOOMBERG