According to a latest research by Deutsche Bank, in near future the economic growth gap between major Asian emerging market and the rest will remain significant. The latest research by Deutsche Bank states that structural factors such as the per capita income and demographic trends are likely to favour the South Asian countries such as India and Indonesia over other emerging markets for now. Importantly, there is an economic slump in the BRIC majors like Brazil and Russia, the two countries hit particularly hard by the recent commodity slump.
"Neither the middle-income trap nor demographic drag will be constraining economic growth in India and Indonesia for the foreseeable future," the report said adding "a combination of macro-stability and moderately supportive policies aimed at raising the physical capital stock, including infrastructure, should suffice to maintain high economic growth rates”.
The report, however adds a caveat that the finding does not intend to advocate that broader, productivity-enhancing reform would not be desirable in terms of raising potential growth in the emerging markets - "just that important structural factors will favour India and Indonesia over the other emerging market for the time being", it added.