South Indian cities lead the way in a difficult year
While we expect 2023 to be a difficult year for cities in the Asia Pacific region, we still see some bright spots. Notably, we expect cities that are less exposed to weak global trade and those with strength in fast-growing sectors to show some resilience. Furthermore, Chinese cities will probably benefit from a loosening of Covid-19 related restrictions in 2023. Bengaluru’s and Hyderabad’s economies will most likely continue to outperform their Asia Pacific and Indian peers in terms of growth in 2023, with the information and communication sector as their main driver. Bengaluru’s large information and communication sector will help it weather the global downturn in goods trade.
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- Furthermore, while Ho Chi Minh City’s growth will slow significantly in 2023, we expect it to remain among the fastest growing cities in the region, in part due to global supply chain diversification. Also, we expect Bangkok to be one of the few cities in APAC to have its economic growth accelerate in 2023. The return of tourists is a key driver of this forecast.
- In China, Shanghai and Beijing will probably benefit from a 2023 less marked by Covid-19-related restrictions. Recent announcements do seem to point in that direction, but the road to normality is still long. Although consumer-oriented sectors such as retail trading and hospitality are expected to do better than industry, the pace at which consumer confidence improves will be tentative.
- Among advanced APAC cities, we expect Taipei to do better than Seoul, which in turn will outperform Tokyo in terms of GDP growth in 2023. We forecast the Taiwanese capital to benefit from its lagged reopening and from catch-up growth in 2023. In Australia, we see Brisbane performing relatively well helped by healthy demographic growth.
Indian cities’ growth will outpace rest of APAC in 2024
Economic growth will generally remain subdued across major APAC cities in 2024. Nevertheless, we think that some cities will stand out for their better performance. These cities are either located in an economically dynamic country, as is the case for Bengaluru and Hyderabad, or will benefit from somewhat better prospects for their manufacturing sectors, for instance Singapore.Find Out More
Office jobs underpin our five-year employment growth outlook for APAC
Office-based sectors have been the key driver of economic growth across APAC’s key cities over the last 10 years. We forecast that will continue, generating many additional jobs.Find Out More
APAC’s leading cities show big variations in relative strengths
Tokyo is easily the largest Asia Pacific city by GDP, but the big four Chinese cities are catching up. We forecast that Tokyo's economy will be overtaken by Shanghai in 2033, and by Beijing in 2036.Find Out More