The Ten Fastest Growing Countries in 2019-2020
China, India and the industrialized countries of the ASEAN region form the world's largest growth area.
Published by Luigi Bidoia. .Premium price Forecast Export markets South-east Asia Foreign market analysis
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The growth of the world economy is slowing down, making international competition more heated. It is increasingly important to identify markets which present the best combination of risks and opportunities.
Choosing where to export is a complex decision-making process. It should be based on a SWOT Analysis that considers both the strengths and weaknesses of a company (its knowledge of different markets, competitive factors, organizational skills, etc.) and the opportunities and risks in potential markets1.
However, even in a contracting phase of the world economic cycle there are countries that are characterized by significant growth rates. Without prejudice to the above warning, it may be useful to consider such countries as candidates for new initiatives or further development of a internationalization strategy.
In this article we will focus on 10 countries that meet the following conditions:
- Average annual growth rate of GDP above 4% in the period 2019-2020 (International Monetary Fund, April 2019)
- Average annual growth rate of imports in euro above 4% in the 2019-2020 (StudiaBo, April 2019)
- Quality imports (high and medium-high range) above 5 billion euro in 2018 (Ulisse Information System)
The following graph shows ten countries that meet these conditions.
The different countries are positioned using their expected GDP growth rate (x-axis) and euro import growth rate (y-axis). The size of each country circle is proportional to the level of quality imports in 2018.
The measures used in the graph were selected on the following considerations:
GDP growth identifies countries that have particularly favorable conditions in terms of demand growth. On the basis of this measure, Ethiopia, India and the Philippines are characterized by a very favourable scenario, with an average growth rate exceeding 7% in 2019-2020.
However, for a company wanting to export, the most significant measure is the growth of imports in the target market, in the currency of the exporting company. This measure can be used by a company as an indication of the growth trend for sales in that market. If we consider companies that have costs and prices denominated in euro, then Ethiopia, Egypt Iraq, Vietnam, India and the Philippines, are high-opportunity markets. In fact, they have an average annual growth rate of above 6% for imports in euro 2.
For companies operating in economies with high labour costs, significant imports constitute the market segments in which premium prices are recognized (by product type and price range). Only in these segments is the market contestable. On the basis of this measure, China emerges as unique: not only has it a high growth rate of both GDP and euro imports, but with 681 billion euros of quality imports in 2018, it was the first-placed importer of quality goods in the world. Other Asian countries (Vietnam, India, Philippines, Malaysia and Indonesia) follow far behind China with quality imports of less than €50 billion. Quality imports in non-Asian high-growth countries do not reach €10 billion.
The world region that presents the greatest export opportunities in 2019-2020, for companies operating in economies with high labour costs, is by far that formed by China, India and the more industrialized economies of the ASEAN (Association of South-East Asian Nations) bloc: Vietnam, Philippines, Malaysia and Indonesia.
Egypt, Iraq, Ethiopia and Panama are also among the ten countries expected to grow most in this two-year period, but they have limited levels of imports of quality goods.
1. For an clear approach to a first phase in choosing export markets, see Market selection .
2. The growth rate of euro imports is equal to the GDP growth rate, if the country's propensity to import is equal to 1 and if the change in its euro exchange rate is equal to its domestic inflation. If the country's propensity to import is higher than 1 or the currency is appreciated in real terms, then euro imports grow more than GDP growth.