Asia’s growth map is changing
Beyond export-led growth and towards more home-driven momentum
Asia has been one of the most important engines of global growth in the past two decades, and its momentum remains strong. According to the International Monetary Fund (IMF), Asia and the Pacific’s GDP are projected to grow at about 3.9% in 2025 and 4.0% in 2026.1 Although this marks a moderation from previous years, Asia is still expected to contribute roughly 60% of global growth in 2024.2
This sustained momentum offers two core advantages for investors: growth potential and diversification. Asia’s economies are still climbing the income curve, supported by expanding consumer bases, rapid digital adoption, and industrial upgrading. At the same time, the region’s growth cycles often exhibit lower correlation with those of the United States or Europe, which may offer diversification benefits in multi-asset portfolios by helping to mitigate overall volatility during periods of varying global economic performance.
Asia’s growth model is transitioning from export-led expansion toward more diverse, domestically influenced patterns amid growing global trade uncertainty.
As Asia's growth story moves into a more complex stage, global investors need to closely track its changing patterns to keep an edge. The old focus on simple, export-driven gains is fading, replaced by a broader picture: rising innovation centers, updated government priorities, and stronger sources of economic stability. Which countries will drive the region's changes through 2035? How will shifts in trade paths, technology sectors, and money flows alter investment options across Asia?
Asia’s key drivers and investment shifts through 2035
Asia's economic trajectory shows potential for notable changes over the next decade, with several countries positioned to contribute significantly to regional growth alongside adjustments in trade, technology, and capital movements.
Several Asian markets exhibit characteristics that could position them to play influential roles in the region's growth through 2035, including robust domestic demand, innovation capacity, and resilience to external pressures. Recent 2025 outlook suggests Asia could maintain robust growth, with the region projected to expand at around 4% in 2025, surpassing the global average of 2.7%.3 While long-term projections involve uncertainties, China, India, and Southeast Asian nations like Indonesia, Vietnam, and the Philippines are expected to be influential players, potentially elevating the region's economic weight.3
China, despite facing headwinds like property sector adjustments, retains significant scale and innovation potential. It is expected to remain a major force, with recent forecasts from the World Bank projecting GDP growth at 4.8% in 2025 and 4.2% in 2026, bolstered by stimulus measures and pivots to high-tech sectors such as AI and electric vehicles.4 This highlights opportunities for selective exposure to innovation-driven industries like semiconductors and renewables, where targeted allocations—via thematic funds or direct equities—can potentially capture upside potential, provided investors balance against ongoing regulatory scrutiny and geopolitical tensions to maintain diversified resilience.
Consider India, which Goldman Sachs projects could become the world’s fastest-growing major economy and potentially reach a $10 trillion GDP within the next decade. This outlook is supported by a young demographic profile, expanding domestic consumption, and sustained investment in infrastructure, factors that continue to attract long-term capital. Growth opportunities are particularly visible in consumer goods, renewable energy, and financial technology. J.P. Morgan’s Asia Mid-Year Outlook 2025 echoes this optimism, highlighting India’s relatively low export dependence, around 1.1% of GDP⁵, as a buffer against global trade volatility. This internal demand orientation may help sustain economic momentum through the next decade. For investors, thematic allocations targeting India’s rising middle class and consumption-led sectors may offer long-term growth exposure, while maintaining diversification and close attention to fiscal reforms remains essential to manage concentration risks.
In Southeast Asia, Vietnam stands out for its growing role in diversified global supply chains, attracting steady inflows of foreign direct investment in electronics and manufacturing. Production costs remain significantly lower than in developed markets, reinforcing their competitiveness as companies continue to relocate operations across the region. According to recent World Bank estimates, Vietnam’s near-term growth is expected to range between 6.6% and 6.8%, though external headwinds such as trade tensions and tariff adjustments could temper this momentum.6 For investors, these dynamics highlight the case for selective exposure to ASEAN-focused or supply chain–themed strategies, while maintaining vigilance toward policy and trade-related risks that may affect export-oriented sectors.
Advanced markets like Japan, Korea, and Taiwan offer complementary stability through technology leadership. Japan's wage growth and corporate governance improvements could foster a cycle of domestic demand and investment returns, while Korea and Taiwan's semiconductor ecosystems position them well for AI-related expansions.
Beyond individual markets, the region’s economic architecture is also being reshaped through deeper integration. Initiatives such as the Regional Comprehensive Economic Partnership (RCEP) and ongoing supply chain diversification are strengthening cross-border linkages and supporting the development of regional value networks. These shifts suggest that Asia’s next decade of growth will be increasingly interconnected, where technology transfer, capital mobility, and policy coordination play as much a role as traditional trade. For investors, a clear understanding of these structural linkages, including how trade frameworks, innovation ecosystems, and financial flows reinforce one another, will be essential to identify areas where long-term value creation is most likely to emerge across the region.
Key takeaways
Asia’s growth story is entering a more differentiated phase. Over the next decade, investors will need to look beyond headline numbers to identify where structural shifts, innovation, and domestic demand come together. Economies such as India and Vietnam are expected to benefit from demographic momentum and supply chain diversification, while China’s innovation sectors continue to play a strategic role despite cyclical challenges.
At the same time, regional integration, digital transformation, and evolving policy priorities are redefining how value is created and shared across Asia. In this environment, maintaining a multi-asset and regionally balanced approach, grounded in sound fundamentals and resilience, will be essential for navigating both opportunities and volatility.
By staying informed and focused on long-term drivers, investors can better position themselves to take part in Asia’s next chapter of sustainable growth.
References:
1 https://www.imf.org/en/Publications/REO/APAC/Issues/2025/04/24/regional-economic-outlook-for-asia-and-pacific-April-2025
2 https://www.imf.org/en/Publications/REO/APAC/Issues/2024/10/31/regional-economic-outlook-for-asia-and-pacific-october-2024
3 https://www.asiahouse.org/files/documents/Asia-House-Annual-Outlook-2025.pdf
4 https://www.reuters.com/world/asia-pacific/world-bank-lifts-china-2025-gdp-forecast-48-ahead-slowdown-next-year-2025-10-07/
5 https://privatebank.jpmorgan.com/apac/en/insights/markets-and-investing/asf/asia-mid-year-outlook
6 https://www.worldbank.org/en/country/vietnam/publication/taking-stock-viet-nam-economic-update-march-2025
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