Emerging Asia will remain the world's fastest-growing region in 2009-10
It’s tough out there. Domestic market troubles are being compounded by a wider downturn across western economies, the weak dollar, Sterling’s descent and difficulties in accessing capital.
Despite this, some markets will continue to grow in 2009, albeit with two significant caveats: the majority of growth will be in far flung, emerging markets and their GDP growth will be at far lower rates than their stellar performance in recent years.
As the World Bank put it starkly in its Global Economic Prospects outlook for the year ahead: “In the transformed economic landscape, we will face a reality in 2009 whereby 100 per cent of world growth will be generated in developing countries.”
Emerging Asia will remain the world's fastest-growing region in 2009-10. The Asian Development Bank predicts positive growth for practically every economy in the region - from Malaysia, Singapore, the Philippines and Indonesia to India, Pakistan, Sri Lanka, China, Korea, Azerbaijan, Kazakhstan and Uzbekistan.
Of Asia’s two BRIC economies:
China’s GDP growth this year will be 6 per cent, down from 13 per cent in 2007
India's GDP is to grow by 5.6 per cent in 2008/09 and 5.2 per cent in 2009/10, compared with an annual rate of 9 per cent or more in the past three years
These figures were the latest predictions from the Economist Intelligence Unit (EIU) at the end of January.
In Latin America, meanwhile, the EIU expects Brazil’s economic growth to be above the regional average, largely owing to the fact that the Brazilian economy remains relatively closed, domestic financial markets are relatively deep, and the government has fiscal room to implement some countercyclical measures.
Its predictions are that Brazil will grow by 1.6 per cent in 2009, its lowest rate since 2003, increasing to growth rates of 3.2 per cent in 2010.
The outlook for the cash-rich Middle East is positive – at least in relative terms. In December 2008, the EIU predicted overall GDP growth for the region at 4.4 per cent in 2009, rising to 5.2 per cent in 2010 as global demand picks up.
Qatar, which is rolling out a series of huge liquefied natural gas (LNG) plants over the next three years, will buck all trends, recording double digit GDP growth. Growth averages are also likely to be sustained by Libya, which is bouncing back after the ravages of the sanctions era, and Iraq, which has even more ground to make up after years of both war and sanctions.
Saudi Arabia is expected to achieve real GDP growth of 3 per cent in 2009, followed by 3.8 per cent in 2010. Meanwhile, continued government investment in Abu Dhabi is likely to mean that the UAE as a whole still expands in 2009-10.
Source: Enterprise Ireland