AS per OECD latest report, GDP growth in Emerging Asia, the 10 member countries of the Association of Southeast Asian Nations, China and India, is expected to come in at 6.1% in 2019-23, fuelled by domestic demand. Southeast Asia’s growth should also remain strong at 5.2% over the same period.

The OECD Outlook notes that foreign direct investment in the region has stayed strong, with positive impacts on job market prospects. Inflation trends vary partly due to variations in price support measures. Several central banks in the region have raised interest rates in response to the monetary normalisation of advanced economies, as well as price and exchange rate pressures. Looking ahead, maximising opportunities related to technology in financial services, strengthening export performance amidst rising protectionism and mitigating natural disaster risks are the main challenges to the region’s economic performance.

A special chapter of the Outlook analyses traffic congestion in Emerging Asia’s cities, on the back of rapid population growth, increasing ownership and use of private motor vehicles, and the lack of sufficient alternative travel modes such as public transportation. Congestion makes cities less efficient, imposing significant economic, social and environmental costs.

Smart transportation systems are a priority for policy makers in Emerging Asia. They aim to provide innovative services relating to different modes of transport and traffic management and enable users to become better informed and make safer, more coordinated and smarter use of transport networks. Progress has been achieved in recent years thanks to regional initiatives; however, for many cities in the region, room for improvement is still ample.

The report argues that a combination of policies focusing on travellers’ transportation decisions is instrumental. Expanding and upgrading public transportation systems would help handle the growing transportation demand without large increases in the use of private motor vehicles. The rising demand for private transportation could be contained by developing price-based and non-price-based policies further. Increased use of technologies and innovations can make traffic management more efficient. Fostering flexible work arrangements would help reduce usage of urban transportation systems. Finally, rethinking urban planning with greater consideration of its effects on transportation demand can reduce congestion over the longer term.

This 2019 Outlook also includes an analysis of recent developments in regional integration across key policy areas and country notes addressing domestic structural reform challenges in the ten ASEAN countries, China and India.