Move over, Shanghai. The fastest growing city in Asia over the next five years will be Delhi, according to Oxford Economics. Chinese cities make up only three of its top 10 list, with India accounting for six. Ho Chi Minh City is the sole outsider beyond the two giants.
Delhi's economy is forecast to grow at an average annual rate of 8.5 percent over the next five years, with the southern city of Chennai and the financial hub of Mumbai seen expanding at a pace of 7.8 percent and 7.6 percent, respectively. Beijing, which is in 10th spot, is seen growing at 6.2 percent a year.
"Our forecasts suggest that growth in China will be more evenly spread in future than in the past, with second-tier cities gradually accounting for more economic growth," said Richard Holt, head of global cities research at Oxford Economics. "However, that adjustment takes time. Meanwhile the national economy is being forced to slow."
India, on the other hand, is seeing stronger growth and rising confidence. India's GDP growth is set to surpass China's this year and next, according to the IMF. If Prime Minister Narendra Modi's government makes it easier for foreign companies to do business in the country, then its top cities will be able to capitalize on their lower costs and see very strong GDP growth for years to come, Holt said.
The Presidential Residence in New Delhi, India. Photo: Bloomberg.
Of the other Asian cities, Manila and Jakarta are seen growing 5.6 percent and 6.1 percent, respectively, while Kuala Lumpur will probably expand at a slower pace of 5 percent through 2019, the report showed. Singapore will outpace Hong Kong, while Bangkok will underperform the rest of Thailand, growing just 2.6 percent a year, it said.
Of course, the rapid growth isn't without its problems. Pollution and congestion will likely get worse as India urbanizes at a rapid pace. The Delhi metropolitan area has a population of more than 16 million, and the city already has the world's worst air. It may well be forced to follow China's lead in cutting coal consumption and rebalancing. Until then, there's no stopping it.