BAKU, Azerbaijan, April 23. By virtually every measure, the Global South is rapidly gaining economic weight, Trend reports with reference to the latest outlook of Boston Consulting Group (BCG) titled ‘In a Multipolar World, the Global South Finds Its Moment’.
“If the United Nations G77, which encompasses 133 nations not including China, is used as a proxy, the Global South accounts for around 18% of global GDP. But with their combined GDP projected to grow by an average of 4.2% annually through 2029, compared with 1.9% for advanced economies, these nations are likely to drive the lion’s share of global growth. Consumption is growing nearly as fast, fueling dynamic markets for domestic and foreign companies alike,” reads the report.
BCG analysts note that the Global South is also a rising force in trade, which is projected to post 4.4% CAGR over the next five years.
“By 2033, annual Global South trade is projected to approach $14 trillion. A growing portion of those nations’ trade is with each other: South-South trade is projected to expand 3.8% annually through 2033, compared with 2.2% CAGR for North-North trade. Global South nations such as Vietnam, Thailand, and Mexico operate as “connector economies” in trade flows from China to the West. Trade between China and the Global South is expected to grow 5.9% annually for the next decade. As a destination for foreign direct investment, the Global South has surpassed advanced economies ($525 billion in 2023 vs. $464 billion),” the report says.
BCG notes that the recent sweeping reciprocal trade and tariff announcements by the US may alter these flows.
“But investment in the Global South could still potentially benefit under this new scenario. Negotiations between US and Global South nations, such as those recently proposed by Vietnam, may eventually improve tariff outcomes. And most importantly, players in the Global South are increasingly investing among themselves and building new growth and opportunity bridges, balancing partnerships between the different poles in a multipolar world,” reads the report.