In this article, we will be taking a look at the 15 fastest growing cities in the world economically. If you want to skip our detailed analysis of emerging economies you can move directly to the 5 Fastest Growing Cities in the World Economically.
According to a report by the International Monetary Fund, the global growth rate is expected to fall to 3% in 2023 and 2024 from an expected 3.5% in 2022. The report suggests that rising inflation rates have contributed to the current state of the global economy. As per the current data, the global headline inflation rate is expected to fall from 6.8% in 2023 to 5.2% in 2024. Moreover, world trade growth is expected to decline from 5.2% in 2022 to 2.0% in 2023.
However, the future of the global economy is not as bleak as it may seem right now. The report suggests that 2024 may be slightly better for the world. The world trade rate is expected to rise to 3.7% in 2024. Emerging economies are expected to experience significant growth by the end of 2023 and 2024, at 4.0% and 4.1%, respectively. Particularly, emerging economies in Asia are expected to experience the highest growth globally and global growth is on track to rise to 5.3% in 2023 and 5.0% in 2024.
BRICS May Drive Future Economic Growth
Brazil, Russia, India, and China first grouped to form BRIC in 2006. In 2011, South Africa joined the group, which led the cluster to be renamed to the BRICS. These economies were grouped as expectations of high economic growth dominated the prospects for each country. You can take a look at some countries that are expected to experience significant economic growth.
On January 1 2024, BRICS is set to welcome new members formally. These include Saudi Arabia, Argentina, Egypt, Ethiopia, Iran, and the United Arab Emirates. On August 23, Forbes reported how the new arrangement between the BRICS countries could be a political move to attain energy dominance. As per the report, the arrangement immensely benefits China. Saudi Arabia, a major oil supplier to China, will benefit the country by the Riyadh-Teheran détente. The new treaty between Iran and Saudia Arabia promises trade and friendship between the two countries. Iran is a major trade partner with China, and will allow the country to reap trading benefits from both Saudia Arabia and itself. The new arrangement will result in half of the BRICS’ cohort specializing in hydrocarbons while the other specializes in fuels.
On August 28, Forbes added some insights on the growing role of BRICS globally. The report suggests that the importance of BRICS will immensely grow after the new countries formally join the group. According to the report, such will lead the block to bag a 36% share of the global GDP while also accounting for half of the world’s population. The step would prevent the need for countries to depend on the United States as a world economic leader holding transactional dominance. Recently, the Russian President, Putin, stressed the need for a local currency for trade between the countries. The suggestion for a local currency is still under discussion.
These economies are attractive economic zones for more than one reason. These countries are home to a large youth population, have invested heavily in technology and education, and are expected to experience significant economic growth in the coming years. Check out some of the largest economies in the world.
Why are Large Corporations Interested in Emerging Economies?
Large corporations operating on a global scale play a huge role in developing countries. Continuous investment in emerging countries by multinationals creates jobs and boosts economic development. India is a popular attraction for such companies; the large youth population and wide customer base are primary reasons for companies to set up there. Such companies include Unilever PLC (NYSE:UL), Nestlé S.A. (OTC:NSRGY), and PepsiCo, Inc. (NASDAQ:PEP).
On August 9, CNBC reported that What’s Up Wellness raised INR 14.40 crore for its latest seed funding round from Unilever PLC (NYSE:UL). Companies like Unilever PLC (NYSE:UL) see the potential in rising startups and, therefore, often engage in partnering with them to gain access to the market and contribute to the development and growth of the area.
Similarly, other multinationals continue to engage in expansion plans in these cities. On July 31, CNBC reported that Nestlé S.A.’s (OTC:NSRGY) Nestlé India has set aside INR 4,200 crore till 2025 to cater to the company’s expansion plans in the country. The funding will allow the company to open its 10th factory in Odisha. Nestlé S.A. (OTC:NSRGY) has launched over 100 new products in India over the past seven years and has no intention to back down. Suresh Narayanan, chairman and managing director, stated:
“Over Rs 6,000 crore investments are coming around. In this, about a third will be invested in prepared dishes and cooking aids segment, about a third will be in chocolates and confectionaries and rest will be in nutrition and coffee,”
The news above indicates that companies like Nestlé S.A. (OTC:NSRGY) are keen to benefit from a large population, rising incomes, and living standards.
On September 6, CNBC reported that PepsiCo, Inc. (NASDAQ:PEP) is set to invest almost $93 million to develop a factory in Assam, India. This new factory will boost urban development in the city, creating over 450 jobs. The new plant will also develop a more substantial livelihood for almost 5,000 local farmers in the area.
The intersection of efforts by the state along with major corporations is essential to drive economic growth. Companies invest in emerging economies because these nations have significantly grown in technology and infrastructure development in the past and will continue to grow in the future. With that, let’s look at the 15 fastest-growing cities in the world economically.
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Our Methodology
We acquired city-wise population growth rates from the United Nations Urbanization Prospects for our methodology. The growth rate represents the city-wise forecasted population growth from 2018 to 2030. We then tabulated the average annual growth rate of the population for every city. Moving further, we acquired the country-wise GDP per capita growth rates from 2021 to 2022 from the World Bank. We then multiplied the city-wise forecast average annual population growth rate with the corresponding country’s GDP per capita growth rate between 2021 and 2022 to find the compound growth rate of each city.
15 Fastest Growing Cities in the World Economically
15. Delhi, India
Compound Growth Rate: 17.65%
Delhi is among the fastest growing cities in the world economically. The capital is one of the most developed cities in India. The city is forecasted to have a population of almost 39 million by 2030.
Unilever PLC (NYSE:UL), Nestlé S.A. (OTC:NSRGY), and PepsiCo, Inc. (NASDAQ:PEP) are some of the prominent multinational companies that heavily invest in growing cities.
14. Indore, India
Compound Growth Rate: 18.75%
Indore is the 14th fastest growing city in the world in economic terms. The city is known to have a large industrial area, boasting strong trading ties in several industries. The city is forecasted to have a population of almost 3.9 million by 2030.
13. Thành Phố Hồ Chí Minh (Ho Chi Minh City), Vietnam
Compound Growth Rate: 19.86%
Based on our methodology, Thành Phố Hồ Chí Minh is ranked among the fastest growing cities in the world economically. The city is the most populous city in Vietnam and is a hub for technology, education, finance, and media.
12. Dhaka, Bangladesh
Compound Growth Rate: 19.88%
Dhaka is among the fastest growing cities in the world economically. The capital of Bangladesh is leading economic growth in the country. The megacity is home to a lot of employment opportunities making it an attractive destination for the rural population to migrate there. The city is forecasted to hit a population of almost 28 million by 2030.
11. Bangalore, India
Compound Growth Rate: 20.21%
Bangalore is one of the biggest engineering and research hubs in India. The city is expected to experience rapid economic growth in the next few years. Additionally, the city is expected to hit a population of almost 16 million by 2030.
10. Kochi (Cochin), India
Compound Growth Rate: 20.38%
Based on our methodology, Kochi (Cochin) is ranked among the fastest growing cities in the world economically. The city is one of the most populous cities in India and is a hub for business and trade.
9. Thiruvananthapuram, India
Compound Growth Rate: 22.52%
Thiruvananthapuram is one of the fastest growing cities in the world, economically. The city is a major information technology hub in Kerala and accounts for a large number of software exports in the region. The city is forecasted to have a population of almost 3.5 million by 2030.
8. Surat, India
Compound Growth Rate: 23.15%
Surat is the 8th fastest growing city in economic terms. The city is known to have a large diamond manufacturing industry, boasting strong ties with trade. The city is forecasted to have a population of almost 9.7 million by 2030.
7. Thrissur, India
Compound Growth Rate: 25.19%
Based on our methodology, Thrissur is ranked among the fastest growing cities in the world economically. The city is one of the most populous cities in India and is a hub for jewelry and gold production.
6. Hà Noi, Vietnam
Compound Growth Rate: 26.99%
Hà Noi is the 6th fastest growing city in the world, economically. The city is famous for being the art capital of Vietnam. The city is forecasted to have a population of almost 6.4 million by 2030.
Multinational companies bring the world closer together, and systematically push developing economies to upgrade and transition to strong development by a series of investments. Some of these companies include Unilever PLC (NYSE:UL), Nestlé S.A. (OTC:NSRGY), and PepsiCo, Inc. (NASDAQ:PEP).
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Disclosure: None. 15 Fastest Growing Cities in the World Economically is originally published on Insider Monkey.