India, China to drive over one-third of global economic growth by 2030, says WEF

India and China are expected to power the next phase of global economic growth, accounting for over one-third of global GDP expansion by 2030, with domestic business investment emerging as a key driver over the next five years, according to the latest World Economic Forum (WEF) report.

The report titled 'Growth in the New Economy: Towards a Blueprint' highlights Asia’s increasingly central role in driving the global economy, while the US is expected to account for around one-tenth of total growth.

WEF says the emerging global economy will be shaped by fast adoption of Artificial Intelligence, mounting geopolitical tensions, and rising public and private debt. According to its analysis, these forces are weakening traditional growth models and demanding new policy frameworks. “Old growth strategies in the new economy are unlikely to yield returns—and may even erode past gains. The new economy calls for an agile new blueprint for growth,” the report says.

Why Asia will account for half of global growth

The report says that middle-income economies are projected to contribute nearly two-thirds of global GDP growth by 2030, with Asia expected to lead, accounting for more than half of global growth. "In particular, Southern Asia is expected to lead growth within advanced manufacturing, medical and healthcare services, energy technology and utilities, financial services and capital markets, education and training, among other industries," the report says.

What about high-income economies?

Europe and North America are projected to account for a more modest share of global growth, reflecting slower average growth rates despite their already large economic size. Companies in high-income countries expect to rely on exports and foreign demand for growth, the report says. "Domestic consumption and public spending are expected to have a smaller contribution to growth."  

The report explains why developed economies are lagging behind Asia in growth projections. “Higher energy costs and lack of policy stability are seen as the most common barriers to accelerating growth. Other barriers vary widely across regions and income levels, with skills shortages and rigid regulations cited most frequently in high-income countries, while limited access to finance and a lack of infrastructure are among the key bottlenecks in lower-income countries,” it says.

Who will be the winners in the emerging world economy?

According to WEF, a prolonged slowdown in growth and widening economic divides are raising questions about existing growth models across both advanced and emerging economies. Furthermore, geopolitical tensions, including the recent supply disruption in the Strait of Hormuz, risk causing further economic damage and increasing uncertainty about the future path of growth and prosperity across regions. Together, these factors present new challenges and trade-offs, while also opening up some opportunities for economic growth.

“The winners in the new economy will be those who understand competing threats and opportunities and build agile growth pathways, balancing reinvention with long-term thinking and a focus on the fundamentals,” the report says.