Growth has picked up again in the emerging market economies (EMEs) of Asia, and especially in China and India. Higher imports in these countries will contribute to higher GDP growth in the rest of the world, partly through trade balance improvements in advanced economies. However, consumption in the Asian EMEs remains relatively low. Most trade is within Asia, and exports to EMEs account for only a small share of advanced economies’ total exports. Although EMEs will contribute to higher growth in the rest of the world, they are not yet sufficiently large to alone drag advanced economies out of the current economic slump.

They are nevertheless expected to become ever more important for world trade and global growth. Favourable econo-mic and financial balances, demographics and catch-up potential relative to advanced economies spell opportunities for further strong growth. If Asian EMEs are to fuel higher growth in the rest of the world, their growth will need to become increasingly domestically driven.