SINGAPORE — India's stellar economic trajectory alongside strong forecasts for some Southeast Asian countries will be important drivers for global growth, said S&P Global Market Intelligence.
Asia-Pacific is a "key driver" for global economic growth not just in the near term, but over the longer run as well, S&P Global's Asia-Pacific chief economist Rajiv Biswas said at the annual energy APPEC conference.
"When we look over the next decade, we do expect Asia-Pacific to be the fastest growing region of the world economy," he said, noting key bright spots include India, Indonesia, the Philippines and Vietnam.
"A massive expansion on the way in the Indian economy, and also a very favorable outlook in Southeast Asia — where we expect pretty strong growth to continue in some of the economies, notably Indonesia, Philippines, Vietnam, will be among the world's fastest growing emerging markets over the decade ahead," said Biswas.
India's very robust actually… the momentum in the economy looks really quite strong at the moment.Rajiv BiswasGlobal Asia-Pacific Chief Economist at S&P Global
Vietnam's second-quarter GDP growth rose 4.14% from a year ago, faster than 3.28% growth in the first quarter. Southeast Asia's biggest economy Indonesia expanded 5.17% year on year in the June quarter. On the other hand, the Philippine economy grew 4.3%, missing Reuters' expectations of a 6% rise.
India's economy grew 7.8% in the June quarter, marking the fastest pace of growth in a year.
"India's very robust actually… the momentum in the economy looks really quite strong at the moment," the chief economist said. He reiterated S&P Global's forecast that India will surpass Japan to become the third largest economy by 2030, with the country's GDP projected to rise from $3.5 trillion in 2022 to $7.3 trillion by 2030.
As a region, Asia-Pacific's growth is expected to strengthen from 3.3% last year to 4.2% this year, according to S&P's projections.
"Over the next decade, we expect that about 55% of the total increase in [the] world's GDP will come from the Asia-Pacific region," he said.
Where does this leave the U.S. and China?
Still, the U.S. will still remain an important driver of the global economy, accounting for 15% of the world's growth over the next decade, Biswas said.
China will also still be pivotal in this growth story, contributing to about one-third of the total increase over the same period, he said. Biswas also noted, however, that China's recovery has been weaker than expected and the "momentum of growth has been suffering."
China has been pummeled by a slew of economic data broadly missing expectations.
As a whole, S&P is expecting global growth to come in at 2.5% this year and next.
Correction: This report has been updated with the correct name of S&P Global Market Intelligence.