The ASEAN economy, if considered as a single entity, will be the fourth largest in the world by 2050. This is according to Malaysian Prime Minister Najib Razak.
Najib said the ASEAN economy is already the world’s 7th largest. The region’s combined gross domestic product is more than US$2.6 trillion.
“The Organisation for Economic Co-operation and Development (OECD) predicts annual growth of 5.6% over the next four years. ASEAN will be the world’s fourth largest economy by 2050 if current trends continue,” he said at the ASEAN Business Awards Malaysia.
The prime minister said that ASEAN is now building on a strong and consistent record of development and mutual growth. In terms of per capita income growth, he mentioned ASEAN considerably outpaced the world since the late 1970s.
Najib highlighted a McKinsey report which showed the number of consumer households earning over US$7,500 per year will double to 125 million in the next decade.
“With a population over 600 million, larger than the European Union or North America, our potential market is huge. Integrating our 10 nations into an Economic Community is crucial because of this,” stressed Najib.
ASEAN Economy To Benefit from Union
The ASEAN Economic Community (AEC) came into effect at the end of 2015. It aims to transform Southeast Asia into a single economic region, similar to the EU in many ways.
As a result, Investors in Southeast Asia have a massive amount of opportunities.
“Our focus on free trade, fair taxation, and transparency combines to create an open and welcoming economy which attracts investment, growth, and jobs.”
Najib said Malaysia’s success is globally recognized, as attested in the World Competitiveness Yearbook 2014. It ranked Malaysia in 12th place out of 60 economies. Najib also expects his country will move even higher up the list.
He said there’s confidence in Malaysia, citing demand for the US$1.5 billion global sukuk (Islamic Bond) raised recently. Earlier this year, Fortune Magazine listed Malaysia as one of the seven new best emerging markets.
Najib said there was international recognition that the Malaysian economy’s fundamentals remain strong.
“This is heartening because we know that bold steps such as the elimination of fuel subsidies or the introduction of the Goods and Services Tax are not always the most popular, but they are necessary,” said Najib, referring to a policy that his government recently passed.
“This is for the long-term benefit of all Malaysians. That will always be the top priority for my government”.
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