Emerging markets in Asia to stay resilient despite US slowdown

By Timothy Ouyang, Channel NewsAsia | Posted: 18 March 2008 2112 hrs

SINGAPORE : Despite the US economic slowdown, emerging markets in Asia are expected to remain resilient.

And while China's economy is expected to continue booming along, some say India provides a good investment alternative.

Analysts say growing domestic demand and strong investment and consumption rates across Asia are helping to keep emerging markets buoyant. Of these, India and China's economies are expected to lead the region's growth.

But according to some analysts, India enjoys an important edge.

Glenn Maguire, Chief Economist - Asia Pacific, Societe Generale, said: "Economies in Asia that have a low export ratio to GDP and a relatively higher domestic demand share to GDP are probably economies that are likely to either display resilience or outperform in 2008 and 2009. And one of those economies is clearly India."

Currently, exports make up only 15 per cent of India's GDP, while exports account for between 35 and 40 percent of China's GDP.

The Indian economy is seen growing 7.5 percent in 2009, down from an estimated 8.5 per cent this year.

Mr Maguire said: "But those growth rates can be sustained... over the medium term. So, from a medium-term investment perspective, India is likely to remain one of the high growth economies in the globe."

Come 28 March, investors in Singapore will have greater access to the Indian market through an Indian ETF, or exchange traded fund, listed on the Singapore Exchange. The ETF tracks 50 of the largest stocks in India. - CNA/ch