Asian growth region: Strong momentum not only, but mainly in China

The International Monetary Fund (IMF) has recently upgraded its global growth forecast for 2021 from 5.5% to 6.0%. China will be the most important engine for the world economy this year. The data that we have evaluated for the Chinese economy shows that growth in the first quarter of 2021 improved again over the already positively developing preceding quarters. Even assuming quarterly growth will slow in the rest of the year at only pre-covid rates, we regard this year's good start as reason to raise our Chinese GDP forecast from 10% to 11%, which means we continue to be significantly more optimistic than the IMF and most other economists.

However, the strong economic growth not only in China but also in nearly the entire Asian region is only related to the pandemic response to a small extent. The long-term economic momentum there is mainly attributable to demographics. At present, about 60% of the world's population lives in Asia, and almost 20% in China and India alone. According to United Nations forecasts, Asia's population will grow from 4.6 billion persons now to 5.3 billion 2050 and then shrink back to 4.7 billion in 2100. This means that Asia will remain a dynamically growing region in the coming 30 years. We believe China is capable of continuing high growth rates in the coming 10 years. But then, if not sooner, more attention will also focus on other countries thanks to their population growth.