THE WORLD IN 2020 Malaysia GDP growth 4.8% GDP per head $12,050 (PPP: $35,710) Inflation 1.5% Budget balance (% GDP) -3.4 Population 32.4m
The Pakatan Harapan coalition government faces a tricky leadership transition. Mahathir Mohamad, the incumbent and at 95 in July 2020 the world’s oldest head of government, has promised to give way to Anwar Ibrahim, the head of the coalition’s largest party, but may seek to hold on to power. There will be little challenge from an opposition Barisan Nasional coalition in disarray. Economically, the government will focus on balancing the books while supporting low-income households. Spending spree Malaysia
Real GDP, % increase on a year earlier
6 3 0
Budget balance, % of GDP
-3 -6
2011
13
15
17
19 20
New Zealand GDP growth 2.2% GDP per head $42,060 (PPP: $43,370) Inflation 1.9% Budget balance (% GDP) 0.8 Population 5.0m
The Labour Party-led government under the prime minister, Jacinda Ardern, has hit a few bumps in its first term, but the party’s strong response has put it in a good position to secure a second term in office after elections that must be held by November 2020. Both the Greens and Labour’s current coalition partner, New Zealand First, will prefer Labour to the opposition National Party as the inevitable post-vote negotiations get under way. Economic growth will slow as internal demand and foreign trade dip.
of the two main opposition parties are entangled in legal challenges, but they will collaborate to obstruct the government’s agenda. Religious protests by Islamist opposition groups may turn violent, while Baloch separatists will remain active. Pakistan is in the midst of its 22nd IMF financial-support agreement; the resulting erosion of living standards and the rising tax burden will limit economic growth.
Philippines GDP growth 5.2% GDP per head $3,690 (PPP: $10,050) Inflation 2.4% Budget balance (% GDP) -3.3 Population 109.6m
The president, Rodrigo Duterte, will maintain a tight grip on power, supported by a loyal coalition rallied by his daughter and the mayor of Davao City, Sara Duterte. Ambitious plans to revamp the country’s creaking infrastructure will advance slowly. Remittances, a key source of household spending, will fall as America’s growth slips. In the absence of structural reforms and with business confidence softening, fiscal and monetary policy will be used to buoy up the economy, though growth will dip.
Singapore GDP growth 1.2% GDP per head $68,350 (PPP: $107,890) Inflation 0.4% Budget balance (% GDP) -0.4 Population 5.6m
Early elections in the first few months of 2020 will deliver a victory for the People’s Action Party, dominant since 1959, and pave the way for a transfer of power from Lee Hsien Loong, the prime minister, to Heng Swee Keat, deputy prime minister and finance minister. The territory faces headwinds from the trade war between America and China and declining activity in both markets. Government spending directed at education, health and child care will stimulate the economy.
to watch: Fantasy islands. The 78th World Science Fiction Convention is set for Wellington in July and August.
South Korea
Pakistan
GDP growth 2.2% GDP per head $32,370 (PPP: $46,410) Inflation 1.2% Budget balance (% GDP) -1.0 Population 51.3m
GDP growth 2.6% GDP per head $1,220 (PPP: $5,910) Inflation 6.4% Budget balance (% GDP) -7.8 Population 220.9m
The government of the prime minister, Imran Khan, has the tacit support of the army, which enjoys de facto control of defence and foreign policy. Leaders
The governing Minjoo Party under the president, Moon Jae-in, will increase its parliamentary majority at elections in April but remain short of the threefifths majority needed to legislate without seeking allies. The government will maintain open channels with North Korea, inviting sniping from the
Thailand
Shrinking surplus South Korea, trade balance, $bn 125 100 75 50 25 0 2011
13
15
17
19 20
conservative opposition. The administration will use fiscal policy to pump up domestic spending in the face of trade tensions with Japan and the tariff war between America and China. to watch: Spark plug. The government will provide $900m in subsidies to promote electric-vehicle use.
Sri Lanka GDP growth 3.4% GDP per head $4,360 (PPP: $14,990) Inflation 4.3% Budget balance (% GDP) -5.4 Population 21.4m
Presidential elections in late 2019 will deliver victory to Gotabaya Rajapaksa of the Sri Lanka People’s Front (SLPP), returning to power the clique that dominated under the previous president, Mahinda Rajapaksa, Gotabaya’s older brother. If elected, Mr Rajapaksa will trigger early legislative elections in 2020, setting up a clean sweep for the SLPP. Sinhalese nationalism will be fuelled by outrage over bombings blamed on a local affiliate of Islamic State. The economy will rally as tourism and government spending pick up. to watch: Looser belts. Fiscal discipline will ebb as an IMF funding programme runs out in mid-2020.
Taiwan GDP growth 1.7% GDP per head $25,880 (PPP: $57,440) Inflation 0.2% Budget balance (% GDP) -1.2 Population 23.6m
The Democratic Progressive Party (DPP) will retain its hold on the presidency in elections scheduled for January, securing a second term for the incumbent, Tsai Ingwen, but will lose its legislative majority to the opposition Kuomintang (KMT). The DPP has lost steam: it has not kept policy promises and the economy is flagging. A KMT majority will support the existing policy of diversifying trade links to sustain exports. to watch: Triangulation. America’s clashes with China over trade present opportunities for Taiwan, such as more co‑operation with America on defence, though mostly on a commercial basis.
GDP growth 2.1% GDP per head $7,540 (PPP: $20,600) Inflation 1.3% Budget balance (% GDP) -2.6 Population 69.8m
Prayuth Chan-ocha, the prime minister and a former coup leader, will rely on backing from the military-appointed Senate to make progress on a programme of infrastructure renewal and increased foreign investment. Animosity between pro- and anti-junta forces will simmer without threatening the status quo. Relations with Western powers, curtailed after the coup in 2014, will be restored, but China’s role as an economic and diplomatic partner will grow. The economy will slow as exports slip and domestic consumption remains lacklustre.
Uzbekistan GDP growth 5.4% GDP per head $1,720 (PPP: $8,400) Inflation 11.9% Budget balance (% GDP) -1.2 Population 33.5m
The president, Shavkat Mirziyoyev, who succeeded long-time leader Islam Karimov in 2016, will try to liberalise an economy bungled under the long rule of his predecessor, and to improve ties with neighbours. But he will also seek to retain Mr Karimov’s tight control over social and political life. Parliamentary elections in late 2019 or early 2020 won’t change the power dynamic. Tax reform and higher social spending will keep the economy in catch-up mode, though questions will be raised about the quality of official statistics.
Vietnam GDP growth 6.5% GDP per head $3,080 (PPP: $8,640) Inflation 3.1% Budget balance (% GDP) -3.5 Population 97.3m
Power is concentrated in the president, Nguyen Phu Trong, who is also Communist Party general secretary— the first person to hold both posts since Ho Chi Minh. The economy will benefit as foreign companies relocate from once-cheap China, a trend accelerated by China’s trade tussle with America. Domestic economic reforms will give a further boost, with the government bent on restructuring state-owned industries and pepping up trade. The economy will thrive, though the pace will slow slightly. to watch: Pole position. Formula 1 will see the first ever Vietnam Grand Prix when Hanoi hosts the third race of the season in April.
25