The U.S. and China trade war and a slowdown in global import-export traffic are taking a toll on economic growth in developing Asia, prompting the Asian Development Bank to cut its forecasts for the region. The Manila-based regional lender now expects to see 5.5 percent growth in 2020 for developing Asia, a group of 45 economies that includes China and India but not Japan.
The ADB says prolonged trade tensions are still the primary risk to the region’s outlook, but a handful of countries are expected to outperform their neighbors next year. In this video, we take a critical look at all these. These are the economies it says will grow the fastest between now and 2030:
Bangladesh: Bangladesh is forecast to add another 8 percent to its GDP on the back of increased foreign investment in low-cost textiles, garments, and shoes. The country has grown at least 6 percent per year since 2011. Wages that average just 101 dollars per month help bring in some of that investment. Domestic demand and higher living standards add to the South Asian country’s growth, says Rajiv Biswas, Asia Pacific chief economist with the market research firm IHS Markit. Foreign direct investment rose 19.5 percent in the first half of 2019 to 1.7 billion dollars on the growing ease of doing business, according to local media reports.
Notable sectors driving the Bangladesh economy are Clothing and Textiles, E-Commerce, Information Technology, Education, Banking and Finance, Logistics, and construction
India: India should grow 7.2 percent as it seeks to become a new powerhouse for manufactured goods including electronics, per government policy. A 7.2 percent GDP growth rate would mark a fall from 8.17 percent in 2016, and hover near levels of the past two years, World Bank figures show. A decline in output for eight core industries, some of which face a lack of credit, would stop the economy from growing faster in 2020. However, the central bank has offered monetary stimulus and a tax cut this year for a bit of relief.
Notable sectors driving the Indian economy are Agriculture, Clothing and Textiles, Manufacturing, E-Commerce, Information Technology, Education, Banking and Finance, Renewable Energy, Tourism, and Real Estate
Tajikistan: Tajikistan is forecast to grow 7 percent as the former Soviet republic gets a boost from its gold and silver mines, metal processing, and remittances from about a million citizens who live abroad. Tajikistan’s GDP expanded by 6.9 percent in 2016, 7.1 percent the following year, and 7.3 percent last year. The industry and services sector has led growth along with buoyant domestic demand, the World Bank says. Notable sectors driving the Tajikistan economy are: Agriculture, mining, Manufacturing, service sector
Myanmar: Myanmar’s economy should grow by 6.8 percent. This country with a GDP of just 67 billion dollars is starting from a low base. Myanmar’s manufacturing export sector has been growing rapidly over the past five years, which is helping to support rapid economic growth according to Biswas. The Southeast Asian country has been transitioning to a civilian-led government and adopting economic reforms aimed at attracting more investment. Infrastructure outlays and consumer spending is coming in behind the factory investment to raise the GDP. The economy has expanded accordingly at more than 6.5 percent annually over the past three years. Notable sectors driving the Myanmar economy are: Agriculture, mining, Manufacturing, service sector
Cambodia: Cambodia is expected to grow 6.8 percent. China’s investment in Cambodia has accelerated the GDP of this Southeast Asian country of 16.5 million people, piggybacking on a pickup in garment manufacturing like that seen in Myanmar and Bangladesh. Chinese investors are adding real estate, coastal resorts, and infrastructure such as roads and, eventually, two airports. China had invested some 2 billion dollars in Cambodian infrastructure as of 2018. But 6.8 percent growth would fail Cambodia’s 7 percent plus growth as logged by the World Bank every year since 2011. Notable sectors driving the Cambodia economy are: Agriculture, construction, mining, Manufacturing, service sector, and Renewable Energy
Vietnam: Vietnam should grow 6.7 percent next year. The Southeast Asian country that has grown at more than 6 percent per year since 2012 is doing a lot of what Bangladesh does but shifting into more value-added manufactured goods such as electronics. Foreign investors still power the economy, to wit a 69.1 percent year-on-year increase in direct investment in the first five months of this year to 16.74 billion dollars. Notable sectors driving the Vietnam economy are Agriculture, mining, Manufacturing, service sector, hospitality, and tourism.
The other developing Asian economies that the ADB forecasts will grow more than 6 percent include Nepal and the Maldives at 6.3 percent each, Laos and the Philippines both at 6.2 percent, and Mongolia at 6.1 percent.