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FILE PHOTO: Indian Prime Minister Narendra Modi (2nd L) and his former Japanese counterpart Shinzo Abe (L) bow to national flags as they review an honor guard before their meeting at Abe's official residence in Tokyo, Japan November 11, 2016.
India’s rise makes Japan anxious
India is set to surpass Japan as the world's fourth-largest economy by 2025, earlier than previous forecasts. This marks Japan’s second year of decline in global GDP rankings, after falling from third to fourth place behind Germany in 2023.
According to the International Monetary Fund, India’s nominal GDP will top $4.34 trillion next year, slightly above Japan’s projected $4.31 trillion. The subcontinent’s GDP already overtook that of the United Kingdom in 2022 and grew by 7.8% in 2023.
India's economic ascent has been powered by strong domestic demand, as its population surpassed that of China last year. It experienceddouble-digit growth in its steel, cement, and automobile manufacturing sectors. India now uses its Rupee rather than the dollar for trading with 27 countries, and its 134 billion online transactions account for46% of all global digital payments.
In contrast, Japan's GDP growth lagged at 1.9% in 2023 after decades of stagnation, and the OECD projects an anemic 0.5% increase in 2024. Japan’s woes are exacerbated by its aging population, low productivity, and a stubbornly weak yen.
None of this is good news for the government of Japanese Prime Minister Fumio Kishida, amid a swirling party finance scandal and abysmal approval ratings. He’ll need to survive a leadership election in the fall for his Liberal Democratic Party, which will be looking for a leader to take them into national elections next year. With headlines like these, Kishida is expected to face defeat.FILE PHOTO: Vietnam's President Vo Van Thuong speaks as he attends the Indo-Pacific Economic Framework (IPEF) Leaders event at the Asia-Pacific Economic Cooperation (APEC) CEO Summit in San Francisco, California, U.S. November 16, 2023.
Vietnam’s president may be forced out amid power struggle
The parliament in Hanoi is meeting Thursday in a special session on “personnel matters,” fueling speculation that President Vo Van Thuong may be pushed out. The official reason is likely to be related to provincial corruption scandals – but behind the scenes, Vietnam’s top leaders are vying for a position to replace ailing Communist Party chief Nguyen Phu Trong.
Trong is 79 and was hospitalized in January with an undisclosed illness. Rumors even swirled that he had died before he appeared in parliament, still alive, but looking feeble.
“Since then, there has been increased politicking within the Communist Party, as people try to gain a lead over the others in succeeding Trong,” says Melinda Hoe, a Vietnam expert at the Eurasia Group.
Vietnam’s presidency is largely ceremonial, but whoever holds it is in serious contention to succeed Trong after the 2026 Party Congress. And Vietnam’s in need of capable leadership: With falling birthrates and low incomes, the country needs to get rich – before it gets old.
The Graphic Truth: Is the US economy in a recession?
The short answer is: we don't know (yet).
The US economy declined 0.9% in the second quarter of 2022 compared to the previous three months after shrinking 1.6% in January-March, entering, in theory at least, a "technical recession" — economist-speak for two consecutive quarters of economic contraction. But does that make it official? Nope.
Many economists regard that definition as too narrow because it doesn't take into account other indicators beyond real GDP performance. Indeed, the National Bureau of Economic Research, which calls the shots on US economic cycles, says, rather vaguely, that a recession is "a significant decline in economic activity that is spread across the economy and that lasts more than a few months."
To determine what qualifies as a recession, the NBER considers a bunch of other measures of economic activity. These include real wages (minus inflation), industrial activity, or employment — measured by household surveys, not the number of Americans applying for unemployment benefits, now historically low at 3.6% of the workforce.
Also, the NBER takes time to make the call. So don’t be surprised if Americans feel they're in a recession way before the experts decide to label it as such. It’s also possible to have a recession without two consecutive quarters of economic contraction, like in 2001.
In a nutshell: don't buy all the recession chatter for now, but keep an eye out. Even if the Biden administration won’t say the R-word out loud and the Fed still hopes for a soft landing, most economists agree the US economy is more likely than not headed to a recession in 2023, if not earlier.
Why President Biden's first 100 days matter
President Biden has set an ambitious agenda for his first 100 days in office. Why is there so much pressure riding on that small amount of time, which is less than 7% of an American president's four-year term? Ian Bremmer explains how the "first 100 days" idea started 88 years ago, when President Franklin Delano Roosevelt had to pull the United States out of the greatest economic crisis the modern world had ever known.
Watch the GZERO World episode: After the insurrection: will Congress find common ground?
The new wave of innovation is cause for business optimism about 2021
Kevin Sneader, Global Managing Partner at McKinsey & Company, provides perspective on what corporate business leaders are thinking during the global coronavirus crisis:
Should businesses be pessimistic or optimistic about 2021?
It's easy to be gloomy about the year ahead when faced with the realities of a cold, bleak winter in much of the world. Add to that lockdowns across Europe, surging case numbers and hospitalizations, and dreadful events in the Capitol in the US to name a few reasons for pessimism. But I think there is a case for optimism when it comes to this year. After all, it's true to say that it's always darkest before the dawn, and my conversations with business leaders suggest there are reasons to be positive by 2021.
Consider the following, yes, the vaccines are on their way, but so too is the impact of a wave of innovation. Twice the number of new business applications in the US and significant increases in new business starts in Germany, France, the UK and Japan. It's not just the digital economy that is reshaping lives, but science more generally with the impending bio revolution. And new ways of working are being accepted. Manufacturing is reviving and many sectors are seeing signs of confidence returning.
The great Anglo-Irish explorer Ernest Shackleton when faced with a life-or-death challenge of survival in the Antarctic commented, "optimism is true moral courage." It's time for some of that courage as we tackle 2021 with optimism.
Thailand's economic conditions tipped to worsen as coronavirus spreads
More than half of survey respondents predict the Thai economy will be even worse in 2021 than it was last year.
Xi touts China's success in controlling virus outbreak and poverty eradication
BEIJING • Chinese President Xi Jinping touted his government's success in controlling the Covid-19 outbreak, and its hard-won achievements in economic recovery and poverty eradication in 2020, in an address which analysts said emphasised the importance of people and set key national development and economic goals for this year.
Asian economies lead ranking of most efficient healthcare systems
HONG KONG • As a pandemic ravaged the world, Asian economies led by Singapore, Hong Kong and Taiwan topped a ranking of most efficient healthcare systems.