Where next for Asian economies? Clearsighted reforms key for durable growth
In the case of India, this transition of employment has been relatively slow: the share of agricultural employment is higher and has been slower to fall than in many emerging economies
The Asia-Pacific region has undergone rapid development over the past three decades. Between 1990 and 2023, its gross domestic product (GDP) per capita more than doubled. It will generate about 60 per cent of global economic growth this year. In the near term, we expect this to continue: our latest forecasts, finalised in October, show the Asia-Pacific region growing by 4.5 per cent in 2025, well ahead of the global average. For India, we project growth of around 6.5 per cent.
But can this success continue? Will growth remain strong? And how can countries secure good employment—particularly those, such as India, where the working-age population will continue to grow strongly, even as the average age increases?
Thinking about these questions leads us to look closely at how jobs and production have been changing in Asian economies.
For example, over the past 30 years, the share of those employed in agriculture in Asia has halved on average. Why is this important? Moving workers out of low-productivity agriculture jobs to higher-productivity industry and service sector jobs has been instrumental in raising productivity in the Asia-Pacific region.
In the case of India, this transition of employment has been relatively slow: the share of agricultural employment is higher and has been slower to fall than in many emerging economies. In comparison with other countries, agricultural productivity has been both low and growing slowly, holding back the economy.
But where should those workers go? It is true that many other Asian economies have gained by moving intensively into manufacturing. Consider Vietnam, for example: its share of employment in manufacturing has tripled in the space of 30 years, while its per capita income has quadrupled in real terms. Over that same period, the share of employment in manufacturing in India has increased only modestly, and per capita income by less than it has in Vietnam.