Asia is still the fastest growing region in the world, but it is also entering an era of geopolitical risk, said Alexander Van Kemenade, director of consulting at The Economist Intelligence Unit (EIU) for the region.
Speaking at the Retail Asia Conference in Hong Kong, he noted that “a full-blown global trade war” is the top risk to the global economy this year and outlined a few key developments and forecasts for the region:
India’s middle class set to drive mainstream growth
A “changing of the guard” looks to be well underway in Asia. India is posting high GDP growth rates of over 7%, surpassing China’s current 6% GDP growth – and this growth is set to rise further.
That said, China is showing “some signs of recovery” and even as its economy slows down, it is “still driving the region in terms of the absolute amount of growth that it is creating for Asia”, said Van Kemenade.
But with Chinese consumers becoming increasingly affluent, the country is set to “ease off the gas” where it comes to middle class growth. “If you look at the past decade, China was the main driver of growth in the middle class or mainstream consumers globally,” he said. “In the next decade, that is not going to be China anymore. That’s most likely going to be India.”