Emerging Asia has been one of the most exciting regions in emerging markets during the last two decades and this trend is expected to continue, though the pace of growth has slowed down as the economies transform and mature. By 2040, emerging Asia will account for almost a third of global GDP and more than a quarter of consumer spending, highlighting huge opportunities for business and investors. Risks will remain, requiring business to be agile to identify sweet spots and overcome challenges.
This report comes in PPT.
In 2021, ASEAN’s GDP stood at USD3.2 trillion - this would make it the fifth largest economy globally if it were a country, behind the US, China, Japan and Germany. By 2040, the region is expected to account for 4.4% of the global economy - up from 3.4% in 2021 and just 1.7% in 2000.
Pushed by rising internet access and uptake of digital devices, the region is expected to offer opportunities in e-commerce and other digital services. The launch of the ASEAN Digital Masterplan 2025, will help guide the region to better promoting and integrating digital services for consumers and businesses.
Amid global trade tensions, disruptions to supply chains and the shift to the green economy, the ASEAN bloc has emerged as an alternative location for business diversification. With competitive labour costs, an improving business environment and large prospects in green energy, investors and ASEAN economies are well placed to benefit.
The ASEAN region is projected to be home to 63 million middle-class households by 2040 - a rise of 12.5 million over 2021-2040. This will contribute to the region’s retailing market, especially in urban areas. By 2040, consumer expenditure in the ASEAN bloc is expected to rise by 130%, in real terms, and will account for 5.1% of the global market - up from 3.5% in 2021.
Despite the positives, population ageing, high levels of corruption and rising government debt will remain some of the key challenges for the region’s economies. Challenges need to be considered by investors weighing up the pros and cons of operating in the region, which also needs to be assessed individually at country and city levels.
Despite being a regional bloc, ASEAN economies are at different levels of development with some such as Singapore and Malaysia being on a par with developed economies while others including Laos and Myanmar are still finding their feet. This will require different approaches to harnessing their strengths and weaknesses as targets of investment.
Building presence in the ASEAN region is key for companies seeking large growth opportunities. Focusing on the green economy, digital economy and being geographically diverse on the choices of investment in the region are key to building a successful business strategy.
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