With almost half of global GDP forecast to be in the Asia-Pacific by 2045, there are a huge long term opportunities for economic growth for Australia, said IHS Markit economist.
Speaking at the CIPS Australasia Conference in Melbourne, Rajiv Biswas, chief economist for Asia-Pacific at IHS Markit, explained the balance of economic power will continue to shift to Asia. Forecasting that China will continue to grow, though at a slower rate, Biswas identified India and in particular the ASEAN bloc as the main drivers of growth.
“According to our forecast, by 2023, ASEAN GDP will be bigger than Japan,” he said. “So this is a very important market in the long term and creates a lot of opportunities for Australia.”
Made up of 10 member states, including Vietnam, Malaysia and Singapore, ASEAN’s expansion is expected to offer significant opportunities for Australia to sell in services and goods where it offers a competitive advantage.
“What's really exciting are the opportunities in services, particularly in areas such as education,” Biswas said. “It’s going to be a huge opportunity.”
Turning to the topic of global economic risks, he maintained that a “hard landing” for China posed the greatest threat, while corporate bond markets in a selection of Asian countries also held risks. Discussing the UK's decision to exit the European Union, Biswas explained that while the directly affected parties would be hit hard, Australia was in large part insulated from its impact.
He identified the ongoing dispute over the South China Sea, and the potential flare up in tensions between Iran and Saudi Arabia as key geopolitical risks.