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Saturday, September 27, 2014

Southeast Asia’s economy could be bigger than Japan’s by 2025, says UOB


Southeast Asia’s combined economy will be larger than the UK’s by 2020 and exceed that of Japan by 2025, fuelled by a growing middle class, says United Overseas Bank.

The establishment of the Asean Economic Community from the end of next year will be a key driver of growth for Southeast Asia, UOB economists Suan Teck Kin and Francis Tan said in a note today.

“In view of the dynamism and scale of an integrated region, our projections show that even by growing annually at just about two-thirds of the pace that it was used to during the period of 2001 to 2013, the size of the 10-member Asean economy could exceed US$4 trillion ($5 trillion) by 2020 (roughly the size of Germany in 2013) and would be nearly four times larger by 2030 at US$9 trillion (size of China’s economy in 2013).

“This means that going by our calculations, along the way after 2020, Southeast Asia’s economy would be larger than that of the UK and would overtake that of Japan by 2025. This would make Southeast Asia one of the world’s fastest-growing consumer markets as more enter the middle-class status.”

These projections are achievable, according to Suan and Tan, going by recent developments in Southeast Asia.

These events include the opening up of Myanmar to the international community, Indonesia’s presidential election, and the return of stability in Thailand after the military coup that ousted Yingluck Shinawatra as prime minister.

By 2030, China’s economy would have expanded to US$28 trillion, just shy of the US economy’s size of US$29 trillion, according to the economists.

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