Below is an introductory letter from BGA President and CEO Ernie Bower on the company’s latest half-yearly regional forecast, circulated to clients and prospects to help inform their planning for the upcoming months.

Dear friends and colleagues,

Every six months, we prepare a regionwide forecast designed to help you and our other clients see around corners and anticipate what to expect in Asia. I am pleased to share our second-half 2024 look-ahead with you.

Despite geopolitical tensions, a wave of elections and at least three game-changing trends, Asia will continue to consolidate its role as the most dynamic source of global economic growth.

We build this forecast from the ground up with input from our 225 colleagues working in our offices in 26 countries across the region, including the leaders of our sectoral businesses. We look for trends, use predictive analysis to form views on what will happen in the coming months and years and consider where surprises may come from.

Because we see increasing ties and dynamism between Asia and Africa, including in the policy area, we have begun the process of building a BGA platform like we created over two decades in Asia in Africa, starting in Kenya. In our next forecast, we will broaden our scope to include key countries in Africa.

Geopolitical tensions continue to shape the contours of policymaking and contribute to elevated risk around Asia. The most significant factor in this area is the continuing rivalry between the world’s two superpowers, the United States and China. As China, Russia, Iran and other nations seek to redefine the world order, the implications on Asia are profound. Ongoing wars between Israel and forces in Palestine, between Russia and Ukraine and civil war in Myanmar also factor heavily into political and economic calculus in most parts of Asia. These conflicts, combined with the increased heat, typhoons, flooding and drought caused by changes in the climate, are impacting energy and food security, inflation and global supply chains.

A wave of political transitions will slam into the political status quo this year. Taiwan inaugurated its new president, Lai Ching-te, May 20, with China monitoring developments closely to ensure the new administration does not make statements that Beijing interprets as hinting at independence from China. Elections in India, the world’s largest democracy, will be wrapped up in mid-June and are expected to return Narendra Modi for his third term as prime minister. Empowered, and perhaps anticipating his last term as leader of India, he is likely to accelerate his legacy reforms, including moves to strengthen India by welcoming further foreign investment.

The world’s third-largest democracy, Indonesia, recently elected a new president, Prabowo Subianto, who will take office October 10 and is expected to invest more of his time in defining Indonesia’s role in the world, carefully balancing ties between the United States and China and driving transformational economic reforms in Indonesia, expanding on his predecessor’s commitment to attract foreign investment.

Singapore began its transition to the next generation of leaders May 15, when Lawrence Wong was appointed to replace Lee Hsien Loong, who had served for two decades. Wong will likely call elections later this year, followed by another Cabinet reshuffle. In Japan, Prime Minister Fumio Kishida’s popularity has fallen sharply due in part to a political funding scandal. He plans to introduce reforms aimed at boosting political funding transparency and hopes his performance during the past three years will allow him to run again in September in the ruling Liberal Democratic Party’s leadership elections.

The United States is gearing up for elections in early November, pitting the incumbent Joe Biden against his predecessor Donald Trump. The two aging stalwarts of the Democratic and Republican parties are locked in struggle that early polling suggests is too close to call. Biden has worked hard to bolster ties with allies and friends in the Indo-Pacific and has extended Trump’s focus on competition with China. Both candidates are emphasizing domestic investment and show few signs of interest in a return to U.S. leadership of negotiating new free trade agreements or joining existing agreements in Asia, such at the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership.

Vietnam, which works hard to court foreign investment and integrate its economy into the higher value-added supply chains, is undergoing a vigorous anti-corruption campaign that has toppled senior Communist Party and government leaders. This campaign and jockeying for position will likely continue until the party holds its congress in early 2026 to elect new leaders and set policies for the next five years.

In Myanmar, the ongoing civil war between the ruling military junta and armed ethnic groups and other opposition fighters is expected to continue. The instability is threatening economic collapse and could drive thousands more into neighboring countries.

China’s coast guard and paramilitary militia vessels continue to harass Philippine vessels seeking to resupply sailors on Second Thomas Shoal in the disputed South China Sea, pushing Manila into tighter security and economic ties with the United States and Japan.

In terms of trends, three developments will have a transformative impact on Asian politics and economics in the coming months and years. They will define winners and losers and bend the investment curve in Asia over the coming decade. These include how countries adopt, adapt to and regulate artificial intelligence; manage the energy transition; and respond to anti-globalization — or nationalization — policies. We look at these trends in the context of their impact on various sectors in the region.

Economically, the Indo-Pacific has largely recovered from the pandemic and returned to moderate growth of 2-3 percent, but some like India, Indonesia, the Philippines and Vietnam are roaring back to 5 percent and higher growth. This growth is driven by demand that is slowly picking up, the return of tourism to pre-pandemic levels and, in countries linked to the global supply chain, investment that has risen in such areas as digital equipment, semiconductors and climate change technology. Inflation is easing for the most part, but energy and food prices remain relatively high in the wake of the Russia-Ukraine war and tensions in the Middle East.

The region’s largest economy in China is expected to grow 5 percent for the remainder of this year but still lags pre-COVID growth levels due to slowing foreign investment, flagging domestic and global demand and the ongoing real estate crisis. Domestic challenges in China and a U.S. preoccupation with its upcoming elections and the wars in Gaza and Ukraine seem to have prompted Beijing and Washington to seek to stabilize their ties and explore increased areas of communication in the last half of the year.

We hope you will use this forecast as you make your plans for Asia. We are at your service to help to understand the trends, define challenges and opportunities and implement plans to mitigate risk and grow your business.

My team at BGA and I are pleased to partner with and look forward to working with you through the remainder of 2024 and into the future.

Thank you for your consideration and support.


Ernest Z. Bower, President and CEO, BowerGroupAsia