Asia’s Economic Prowess: How India’s Projected 7.2% Growth Outshines the West

Asian earnings growth is set to surge ahead of its US and European counterparts, according to a recent analysis by CLSA, citing projections from Bloomberg. The report forecasts a significant acceleration in the region's economic growth, outpacing that of developed markets in both 2023 and 2024. This promising outlook underscores the resilience and potential of Asian markets, presenting lucrative opportunities for investors and businesses alike.

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There’s a positive outlook for Asia’s economic growth, especially when compared to other regions. This optimism is shared by the Reserve Bank of India (RBI), which forecasts a robust growth rate of 7.2% for India in the fiscal year 2025.

According to CLSA, the Morgan Stanley Capital International (MSCI) Asia-Pacific index is projected to experience impressive Earnings Per Share growth (EPSg) of 15.0% in 2024 and 11.9% in 2025.

In contrast, the MSCI World index, representing global companies, is expected to see more modest growth of 7.9% and 11.9% in 2024 and 2025, respectively.

Looking at specific markets, the US (S&P 500) is forecasted to grow by 10.5% in 2024 and 13.1% in 2025. Europe, as represented by the MSCI Europe index, is predicted to decline by 5.2% in 2024 before recovering with an 8.1% increase in 2025.

Emerging markets, driven largely by Asian economies, are the standout performers. The MSCI Emerging Markets (MSCI EM) index is expected to surge by 18.1% in 2024 and continue its strong growth with a 14.7% increase in 2025.

Within the emerging markets, MSCI Asia excluding Japan is projected to achieve remarkable growth rates of 22.9% in 2024 and 15.3% in 2025, highlighting Asia’s pivotal role in driving global economic expansion.

India shines within the Asian context, with the RBI’s projection of 7.2% growth in 2025 supported by strong domestic economic fundamentals, including robust consumption, a resilient services sector, and enhanced investment and infrastructure development.

Asian stocks are attracting attention due to their expanding EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and net margins. Companies that consistently enhance their Return on Equity (ROE) and Economic Value Added to Invested Capital (EVA/IC) are also gaining recognition.

The positive outlook in the Asian market is further bolstered by the rapid advancement of artificial intelligence (AI) technologies and the increasing demand for AI capabilities, data centers, and computational power.

A recent report by Yew Kiang Wong, Head of REITs Research, underscores the significant growth potential in the ASEAN region due to these technological advancements, adding to the appeal of Asian markets for investors and analysts.

Thuý Hằng

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