Not every corner of the global economy is mired in gloom. Asia is leading a gentle recovery in emerging market gross domestic product growth rates as India and some countries in Southeast Asia enjoy a surge in economic expansion.
Indonesia’s economy, the largest in the region, grew by 5.2 per cent in the second quarter of the year, recording the fastest year-on-year expansion for 10 quarters. The Philippines also delivered a better than expected performance, growing by 7 per cent in the second quarter, the fastest pace for three years. India, which ranks seventh after France in global GDP rankings, posted an official 7.9 per cent growth rate in the first quarter of the year, a sharp improvement on the previous quarter.
Such numbers have an importance that extends beyond the countries themselves. Not only do they reaffirm Asia’s position as by far the fastest-growing region of the world. They also suggest that the average growth rate for emerging market economies — which include most Asian countries aside from Japan and Singapore — is set to outperform the average growth rate in developed economies by a wider margin. This may be important to portfolio investors who had turned cooler towards emerging markets over the past five years as they watched the growth differential between emerging and developed worlds narrow significantly.