## Asia’s Next Growth Story

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**Canonical URL:** [Asia’s Next Growth Story](https://www.imf.org/en/publications/fandd/issues/2026/09/editor-letter-asias-next-growth-story-gita-bhatt)

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## Bibliographic details
- Authors: GITA BHATT
- Published: September 1, 2026

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### Overview
- Publication: F&D Magazine; author: GITA BHATT; date: September 2026.
- Central question: "how to seize new opportunities to renew Asia’s economic growth."
- Context: Asia is home to "more than half of humanity" and a large share of global growth, trade, and innovation. The region ranges from Pacific islands to China and India, and from sophisticated financial centers to largely agricultural societies.
- Framing: The issue examines choices shaping Asia’s future, with emphasis on Southeast Asia’s economies and the IMF’s annual meetings in Bangkok.

### Major drivers and emerging challenges
- Shifting forces:
  - Trade is fragmenting.
  - Energy security is a concern.
  - Populations are aging.
  - Productivity gains are harder to sustain.
- Demographics and technology:
  - "Some nations can still benefit from expanding labor forces, but all must navigate a more unpredictable geoeconomic landscape."
  - Artificial intelligence, digitalization, and deeper regional integration can open new growth paths.
  - Younger economies may harness expanding workforces; aging economies can use technology to offset demographic drag, "as Japan and Korea are doing already."
- Distributional and social challenges:
  - Recent protests across the region indicate "Too many young people do not see growth translating into secure work and upward mobility."
  - Quotation: Indonesia’s Muhamad Chatib Basri — "prosperity on the dashboard coexists with anger on the street."
  - Policy priority: protect the aspiring middle, pursue structural reforms that generate better jobs, and "nurture the trust between state and citizens."

### Technology, informal work, and digital finance
- Informal sector and AI:
  - Anthony Tan (cofounder of Grab) argues AI-enabled technology can improve lives for informal workers—examples given: street vendors, construction workers, and ride-hailing drivers.
  - Policy caveat: introduce measures appropriate to informal work, not impose rules developed for formal employment.
- Payments and tokenized finance:
  - Asia is undertaking a "pragmatic pivot" away from the US dollar for trade, embracing local-currency settlement, digital payments, and tokenized finance (Dong He).
  - Asia’s digital finance revolution made payment systems "faster and cheaper" (Sethaput Suthiwartnarueput).
  - Next phase: build guardrails to ensure resilience and trust when faced with fraud or failure.

### Regional cooperation and strategic positioning
- Southeast Asia’s strategic posture:
  - Ben Bland: the region can no longer rely on the global system of open rules-based trade that propelled its rise; must become more pragmatic and coordinated by aligning industrial policies, scaling AI development, and deepening ties to other middle powers.
  - Danny Quah: advocates flexible, "multilateral-enough" coalitions with aligned incentives.
- Neighbors' constraints:
  - India: running up against structural constraints (Duvvuri Subbarao).
  - China: technology-led growth is a powerful new engine but requires more balanced growth supported by stronger domestic demand and services consumption (Yanliang Miao).

### Key findings and policy implications
- Findings:
  - Asia’s potential remains "immense" but growth dynamics are changing.
  - Technology and regional integration present both opportunities and risks.
  - Social inclusion and trust in institutions are central to sustained, equitable growth.
- Policy recommendations:
  - Harness AI and digitalization to offset demographic headwinds and to support informal workers with tailored measures.
  - Pursue structural reforms to generate better jobs and protect the aspiring middle.
  - Deepen regional integration and pragmatic cooperation, including aligned industrial policies and coordinated AI development.
  - Strengthen digital finance guardrails to maintain resilient and trusted payment systems.
  - Promote balanced domestic demand and services consumption where applicable to sustain technology-led growth.

### Conclusion
- The next growth story for Asia is about resilience and renewal.
- Southeast Asia can lead through deeper integration, inclusive technology, and pragmatic cooperation.
- With appropriate policy choices, Asia can define not only the global economy’s recent past, but also its future.

*From: Asia’s Next Growth Story — GITA BHATT, F&D Magazine, September 2026.*

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## Content in this bundle

- **Asia's Next Growth Story**
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_Source: https://www.imf.org/en/publications/fandd/issues/2026/09/editor-letter-asias-next-growth-story-gita-bhatt_