In this article, we will be taking a look at the 12 Asian countries with the best economy right now. To skip our detailed analysis of the Asian economy, you can go directly to see the 5 Asian Countries with the Best Economy Right Now.
Asia's Economic Outlook
The last two centuries were dedicated to the Europeans and Americans. Now, experts have titled the 21st century as Asia’s century. As we mentioned earlier, around 80% of developing Asian economies have been categorized as middle-income economies by the World Bank, while 15.6% are high-income and just under 5% are low-income economies.
Growth in developing Asia remained strong in the first half of 2023 despite a weaker outlook for the global economy. The main push in the regional economy came from healthy domestic demand, rebounding tourism, stable financial conditions, and the reopening of China. Despite the downside risks such as high interest rates, food supply disruptions due to the Russia-Ukraine war, and other geopolitical risks including the ongoing Middle East crisis, the economic outlook for Asia seems far better than Europe and the US.
According to S&P Global’s Asian Economic Outlook for 2024, the growth in China and the rest of Asia is projected to be around 4.6% and 4.2% in 2024, respectively. In 2023, China is expected to finish the year with a growth of 5.4% and the rest of the region’s growth outlook is around 4.1%. Though Asia’s growth is expected to outperform Europe and the US, there are potential risks that can impact economic development in the region. China’s property weakness continues to weigh on the economy. The growth in China seems to remain moderate, suggesting economic slack will continue in 2024.
FDI in Asian Countries
One of the major positives for Asia has been the increasing foreign direct investment (FDI) in developing Asian countries. In 2021, the FDI in developing Asian countries was reported at $619 billion. In 2022, the FDI in developing countries in Asia accounted for half of global inflows, which rose to $662 billion, as per the UNCTAD World Investment Report 2023.
The FDI inflows were mainly driven by intraregional greenfield projects, which rose to 24% in 2022. In East Asia, FDI inflows to China soared by 5% to $189 billion in 2022. The main areas of investment in China were manufacturing and high-tech industries. In Southeast Asia, the largest recipient of the FDI was Singapore, with a record increase of 8% in FDI, which amounted to $141 billion in 2022. Malaysia also registered record inflows of $17 billion, increasing by 39% year-over-year. FDI to Vietnam and Indonesia were reported at $18 billion and $22 billion, up by 14% and 4% year-over-year. India’s FDI jumped by 10% to $49 billion, with announcements for greenfield projects and international project finance deals. Bangladesh saw a rise in FDI by 20% to $3.5 billion in 2022. The United Arab Emirates attracted the highest amount of FDI ever recorded, which jumped to $23 billion in 2022. The country attracted the fourth-highest number of greenfield projects in the world, followed by India at third. Whereas, flows to Türkiye jumped by 9% to $13 billion in 2022.
The increase in FDI across the continent shows the interest of global investors and Multinational Enterprises (MNEs). The increasing FDI in Asia is a reflection of how the Asian economy is going to lead the global economy in the coming years. As per Goldman Sachs' projection of the largest economies in the world by 2075, out of the top 25 economies, 11 countries belong to Asia with China and India leading the race.
Major Companies Thriving in Asia
Some of the leading economies in Asia are strengthened by their renowned corporations that have global footprints. Alibaba Group Holding Limited (NYSE:BABA) is a global e-commerce giant that has played a massive role in China’s economic success. Similarly, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the largest semiconductor companies in the world. Yalla Group Limited (NYSE:YALA) is one of the largest MENA-based online social networking and gaming companies that continues to make a massive impact in the sector.
Alibaba Group Holding Limited (NYSE:BABA) dominates the global wholesale e-commerce market. On November 16, Alibaba Group Holding Limited (NYSE:BABA) announced its earnings for the fiscal second quarter of 2024. The company posted earnings per share of $2.14, beating estimates by $0.05. The company posted revenue of $30.81 billion, up 9% year-over-year. Alibaba Group Holding Limited (NYSE:BABA) is focusing on an AI-driven policy to improve and scale its cloud computing services. Here are some of the comments from the Q2 2024 earnings call:
“We are pleased with this quarter’s results, which show that our strategic focus on user-centric value proposition and technology innovation are driving improvements across our businesses.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is accelerating renewable energy adoption. On September 15, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) laid out its updated RE100 sustainability timetable. The company is aiming to reach 100% renewable energy consumption for all global operations in 2040, earlier than the previous target of 2050. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) wants to obtain company-wide renewable energy consumption of 60%, up from 40%, by 2030.
Yalla Group Limited (NYSE:YALA) continues to impact the gaming industry in the region. On November 20, Yalla Group Limited (NYSE:YALA) announced its results for the fiscal third quarter of 2023. The company posted revenue of $85.20 million, beating estimates by $1.59 million. Yalla Group Limited (NYSE:YALA) reported earnings per share of $0.21 for Q3 2023. Yalla Group Limited’s (NYSE:YALA) average monthly active users in Q3 2023 increased by 13.6% to 35.1 million year-over-year. With an all-time high revenue, here is what Yalla Group Limited (NYSE:YALA) representatives said during the Q3 2023 earnings call:
“We are pleased to report that we achieved strong third-quarter results. Our third-quarter revenues reached an all-time high of $85.2 million, supporting the upper end of our guidance, while year-over-year revenue growth from gaming services exceeded 30% once again. Our cost-efficiency initiatives continued to yield positive outcomes. And as a result, net income increased by 44% year-over-year to $35.2 million, and net margin further improved to 41.4%. In the third quarter, we continued to refine our operational processes, enhance flagship applications gamification, improve our gaming mechanics, and optimize our user acquisition strategies.”
Now, let’s take a look at the Asian countries with the best economy right now.
12 Asian Countries with the Best Economy Right Now
12 Asian Countries with the Best Economy Right Now
Our Methodology
To compile our list of the Asian countries with the best economy right now, first, we shortlisted the 20 countries with the highest GDP (PPP). As a simple definition, PPP is calculated by subtracting price differences and nominal changes in the local currency and the US dollar. We then shortlisted the 12 countries with the best economy based on the highest GDP per capita from the list of 20 countries with the highest GDP (PPP). The list is ranked in ascending order of this metric. We sourced data from the International Monetary Fund (IMF) that lists global GDP (PPP) and GDP per capita by country. We also took the data for the Gini coefficient from Credit Suisse’s Global Wealth Databook 2023 and the debt-to-GDP ratio from the IMF and mentioned it for each country. The Gini coefficient describes income inequality or wealth distribution in a country. A Gini coefficient of 0 shows perfect equality and a Gini coefficient of 100 means perfect inequality.
Note: We did not include Russia in our list because even though most of its land is in Asia, the majority of its populace resides in the European area.
12 Asian Countries with the Best Economy Right Now
12. Thailand
GDP Per Capita (2023): $22,490
GDP (2023): $1.58 Trillion
Located in Southeast Asia, Thailand has a debt-to-GDP ratio of 61.4. Thailand has a GDP per capita of $22,490 and a Gini coefficient of 76%. The country ranks among the Asian countries with the best economy right now.
11. China
GDP Per Capita (2023): $23,310
GDP (2023): $32.9 Trillion
China is the biggest economy in Asia. The country has a debt-to-GDP ratio of 83. China’s GDP per capita of $23,310 and a Gini coefficient of 70.90% make it rank 11th among the Asian countries with the best economy right now.
10. Malaysia
GDP Per Capita (2023): $37,080
GDP (2023): $1.23 Trillion
One of the biggest economies in Southeast Asia, Malaysia has a debt-to-GDP ratio of 66.9. With a GDP per capita of $37,080 and a Gini coefficient of 83.10%, Malaysia makes it to our list of Asian countries with the best economy right now.
9. Türkiye
GDP Per Capita (2023): $41,890
GDP (2023): $3.61 Trillion
Officially the Republic of Türkiye is one of the most diverse economies in the Middle East and makes it to our list of the Asian countries with the best economy right now. Türkiye has a GDP per capita of $41,890, a debt-to-GDP ratio of 34.4, and a Gini coefficient of 80.2%.
8. Japan
GDP Per Capita (2023): $52,120
GDP (2023): $6.50 Trillion
Japan is one of the largest economies in the world and has a GDP per capita of $52,210. With a Gini coefficient of 65%, Japan makes it to our list of the Asian countries with the best economy right now.
7. Israel
GDP Per Capita (2023): $54,770
GDP (2023): $537.14 Billion
Israel has a debt-to-GDP ratio of 58.2. The country’s GDP per capita is $54,770 and has a Gini coefficient of 74.9%. Israel ranks seventh among the Asian countries with the best economy right now.
6. South Korea
GDP Per Capita (2023): $56,710
GDP (2023): $2.92 Trillion
Located in East Asia, South Korea has a strong economy with a GDP per capita of $56,710. South Korea’s debt-to-GDP ratio of 54.3 and a Gini coefficient of 67.9% make it rank among Asian countries with the best economy right now.