GDP growth across Asia Pacific is forecast to hit 5.6% in 2017, well above the 3.6% projected worldwide, and 5.5% in 2018. Against this backdrop, the latest findings from Grant Thornton’s International Business Report (IBR) reflect a buoyant mood across much of the region. Business optimism in Asia Pacific has hit a two-year high, driven by improvements from its two biggest economies: China and Japan.
What is driving this positive sentiment? The Chinese economy is becoming much more outward looking, reflected both in its One Belt One Road initiative and the movement of lower skilled jobs to neighbouring countries. This outlook is having a positive trickle-down effect across the region.
At the same time, our research shows there are signs that the ASEAN (Association of Southeast Asian Nations) Economic Community is boosting business growth opportunities and the Trans Pacific Partnership is still seen as an opportunity. These factors are reflected in confidence that free trade will prosper across the region over the next five years.
The outlook isn’t wholly positive as businesses in Asia Pacific cite ageing populations as the biggest threat to the region over the next five years. Potential consequences of this trend include a shortage of labour supply and an impact on government investment. Elsewhere, concerns about territorial disputes still worry Asian business leaders.
Overall, business leaders across Asia Pacific report healthy optimism, fuelled by the prospect of greater trade opportunities. But concerns remain which could threaten growth, if unaddressed. In this report we make the following recommendations to help firms navigate the next 5-10 years successfully.
If you would like to know more about how we can help you in Asia Pacific or around the world connect to your local Grant Thornton member firm.
