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 limit the global recovery. Despite these challenges, some emerging economies, particularly those from Asia Pacific, are expected to sustain solid growth rates and lead 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.
Top 5 Fastest-Growing Economies in 2024
1. India: Strong Investment and Integration into Global Value Chains
India’s economy is expected to grow by 6.7% in 2024, the highest rate among the world’s key economies. Growth will be fueled by a positive trajectory in fixed investment, sustained government capital expenditure, and 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 major drivers behind the country’s strong investment path. The Indian economy will continue to benefit from its youthful demographics, expanding middle class, technological innovation capacity, and deeper integration into global value chains. However, challenges include creating enough jobs for its abundant workforce, addressing fragile energy and food security, and mitigating climate change risks.
2. The Philippines: Moderating Inflation to Support Domestic Consumption
Economic growth in the Philippines is expected to accelerate in 2024, driven by stronger public investment, improving exports, and domestic demand amid moderating inflation. The rebound in tourism and sustained remittance inflows will further support the services sector and household spending.
Challenges include high-interest rates, a potential slowdown in major advanced economies, heightened geopolitical tensions, and extreme weather events that could cause inflationary pressures and lower demand for exports.
3. Vietnam: Booming FDI Inflows Amid Global Economic Fragmentation
Vietnam’s economic expansion is set to gain momentum in 2024, with its real GDP growth rate expected to reach 5.8%, up from 4.9% in 2023. This growth will be driven by sustained demand for exports, positive inflows of foreign direct investments (FDI), and ongoing public investment. However, Vietnam’s export-led growth model makes it vulnerable to external shocks.
Long-term prospects for Vietnam remain bright due to its dynamic export manufacturing sector, growing tech industry, rapidly expanding middle class, youthful and educated workforce, favorable trade and investment policies, and strategic location at the crossroads of global trade routes.
4. Indonesia: Stable Growth Supported by Increasing Global Electronics Demand
Indonesia’s economic growth in 2023 was driven primarily by strong domestic consumption and robust public investment. In 2024, the new administration led by President-elect Prabowo Subianto is expected to continue focusing on infrastructure development to support economic growth. The anticipated upturn in global electronics demand and reviving travel flows will also bolster Indonesia’s exports, maintaining its growth momentum with a real GDP growth rate expected to remain stable at around 5.0%.
5. China: Remaining a Key Contributor to Global Economic Growth
Despite many challenges, China will still record one of the world’s fastest growth rates in 2024, driven by improvements in industrial activity and exports backed by resilient external demand. Increased government spending planned for 2024 will also help boost economic activity. However, a property slump and subdued private consumption will constrain China’s economic expansion.
China will remain a key contributor to global economic growth, but long-term growth prospects are challenged by its aging population, relatively low productivity growth, and ongoing economic decoupling from other countries.
Conclusion
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. For more insights, explore the global economic prospects in our free report, “Global Economic Forecasts: 2024 Outlook – Mid-year Update.”
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