Emerging Markets (EMs) in Asia are seen to grow very fast in the next ten years, with India leading the top 10.
This is in line with the expectations of business and economic leaders that the Asian region is the future of the global economy.
UK-based Oxford Economics, in its report titled “Sustained growth in EMs calls for thrift and innovation,” projected in its February 15 report that the Philippines’ gross domestic product (GDP) will grow by an average of 5.3 percent from 2019 to 2028, second to India’s 6.5 percent.
China and Indonesia’s economies shared third place by 5.1 percent. They were followed by Malaysia with 3.8 percent; Turkey at 3 percent; Thailand at 2.9 percent; Chile with 2.6 percent; Poland, 2.5 percent; and South Africa, 2.3 percent.
Other than the GDP figures, these rankings have also considered other factors, namely funding availability and workforce growth.
Oxford Economics said the wide distinctions in labor productivity growth across these EMs are on the major differences in capital deepening and
total-factor productivity (TFP) growth.
It added that capital deepening stems from investment and that EMs can be financed, in principle, by “imported” capital.
The report shows that “there is a major gap between the relatively small contribution of capital deepening in a large group of EMs and some other – mostly Asian – EMs where the contribution is more significant… that countries with higher gross domestic saving (as a share of GDP) tend to have higher trend growth.”
With this study, the report shows that “the Philippines seems to be a major outlier, but its domestic savings are supplemented heavily by remittances.”
The study also underscores “the critical role of TFP growth, the second of the two key drivers of labor productivity growth, and shows that, again, the variation is large, with TFP growth in 2008-17 ranging from less than zero in Brazil, Argentina, Chile, Mexico, Hungary, Russia and South Africa to more than 2% in India and the Philippines and 3% in China.”
As far as the Philippines is concerned, the work force was projected to increase by an average of 2.3 percent during the next 10 years, the fastest among the 10 emerging markets. – Maris Federez