Planning for the future:
Growth targets for the next decade

Emerging markets are setting long-term goals that tend to converge on establishing long-term growth targets. India, as established in India@2047, aims to become a $30 trillion economy from the current $3.6 trillion by 2047. Saudi Arabia's Vision 2030 plan aims to grow its economy from the 19th largest worldwide to the top 15 by 2030. Similarly, Malaysia, under the Madani Economy Framework, seeks to move its economy from the 37th largest to the top 30 by 2033. Via long-term development plans, South Africa has set a target of achieving an annual average 5.4% GDP growth by 2030; annual GDP averaged 1.3% over the past two years. Peru is also pursuing a nominal purchasing power parity GDP per capita of $30,000 by 2050 from a base of $17,800 in 2023. 

Emerging markets' long-term development plans typically center on seven key areas essential for maximizing future growth: economic diversification, infrastructure development, skill development, sustainable development, digitalization, foreign direct investment incentives and institutional reforms. Public-private partnerships and the promotion of entrepreneurship and small and medium-sized enterprises also feature prominently, with most favoring a close relationship with the private sector and export-led growth. 

Emerging markets are also setting sector-specific objectives. For example, Chile wants to become a major producer of lithium and green hydrogen, and Vietnam aims to secure a 10% share of the world’s semiconductor market by 2030 through its National Semiconductor Industry Strategy. 

Emerging markets are set to drive global economic growth over the next decade, averaging 4.06% GDP growth through 2035, compared to 1.59% for advanced economies. Grouping them, however, overshadows their divergence and intrinsic domestic characteristics. 

Mapping macro-level data on market potential, policy favorability, institutional quality, logistics efficiency and resource availability (labor and financial capital) highlights how emerging markets will begin their journey into the next decade from different starting points¹. By measuring the momentum of emerging markets over time across these five thematic areas² and the current state of their market potential to generate opportunities for the private sector, our analysis shows that Malaysia stands out exceptionally among its peers, owing to strong progress in enacting business-friendly policies and logistics efficiency. 

India, Indonesia and Brazil have made improvements relative to their peers and have the momentum to ascend over the next decade. India boasts high momentum in policy favorability, while Brazil and Indonesia made gains in resource availability (labor and financial capital). 

Economies such as those of China and Mexico exhibit slower momentum but have ample opportunity to continue rising from a strong base. Mexico faces challenges with its institutional capacity, while the Chinese market’s attractiveness for new business opportunities is decreasing. Chile, in contrast, has plateaued, with its momentum slowing due to the deterioration of its institutional quality score. 

South Africa has so far made little progress in reaching the targets set in its 2012–2022 National Development Program (NDP), now extended through 2030. Annual real GDP growth averaged 1.1% during 2012–2022, well below the 5.4% NDP target. In recent years, the country has grappled with fiscal constraints, weaker institutions and infrastructure bottlenecks, particularly in state-delivered energy, rail and port services. These factors combined to slow the NDP's implementation, with gross fixed capital formation falling to 14.1% of GDP in 2022 from 19.3% of GDP in 2010. 

Although South Africa’s economy is highly unlikely to meet the NDP’s growth target, we expect potential GDP growth to increase by an estimated 1 percentage point to 2.5% for 2025–2026 and to 2.76% by 2030 as key infrastructure bottlenecks are eased and gross capital formation and labor productivity strengthen. We also expect a more favorable political environment for passing and executing planned policy changes, with the potential to optimize the operating environment in the energy, rail and port sectors due to the new Government of National Unity’s more constructive approach to the private sector. 

Growing priority sectors such as energy, mining, tourism and manufacturing, among others, will require a stronger commitment to public-private partnerships due to existing fiscal constraints. 

Two important sectors to watch through the end of the decade are the power and rail sectors. We are optimistic about the Electricity Regulation Amendment bill, passed in May 2024, as it will ease electricity production and sales. This will ultimately improve the reliability of electricity supply and allow more consumer choice, encouraging investment and innovation in energy generation. A significant expansion of South Africa’s electricity transmission infrastructure over the next 10 years will be necessary for the successful implementation of the renewable energy program envisioned in the NDP.

Implementing public-private partnerships will be key through 2030 to improve Transnet Freight Rail, the state-owned rail freight logistics and passenger transport company, which has faced significant challenges, resulting in falling volumes and a deteriorating railway system. In March 2024, Transnet published its first draft Network Statement, establishing rules for private sector third-party access to the rail network. Rail reform is part of Transnet's recovery plan and aims to position rail as an affordable, competitive and reliable mode of transport. 

Transnet National Ports Authority has furthermore awarded contracts to private companies to operate and develop South Africa’s largest ports, Durban and Richards Bay. Private sector participation and access to financing are likely to strengthen port performance over the medium term. The phased development of South Africa’s infrastructure in energy, rail and ports will ultimately strengthen potential growth and economic diversification, improving the country’s growth prospects through the next decade.  

Saudi Arabia is ahead of G7 economies in purchasing power parity GDP per capita, a position unlikely to change through 2030. Although our projections show that Saudi Arabia will improve in economic size, it is forecast reach the top 18 globally, rather than its target of top 15, by 2030. 

With the establishment of the Council for Economic and Development Affairs (CEDA), chaired by the now-Crown Prince Mohammed bin Salman, the government has shown increased political willingness to advance its vision for 2030 with direct accountability and project oversight. Since CEDA’s inception in 2016, notable milestones include lifting restrictions on women participating in the workforce, increasing private home ownership and developing a domestic mining industry. 

Improving its business environment will be essential to achieving Saudi Arabia's foreign direct investment (FDI) targets ($100 billion by 2030), particularly when FDI was only $19.3 billion in 2023. Despite strong government commitment, FDI levels have declined across the region, partly due to the regional geopolitical environment.  

In the coming years, efforts to improve Saudi Arabia’s relative regional attractiveness will focus on its regional headquarters program, which provides incentives for companies to establish their regional headquarters in Saudi Arabia. These incentives include exemptions to the quota for employing Saudi nationals, 30-year income and withholding tax exemptions, and priority access to government tenders.

A critical issue to watch is the progress of institutional reforms to ensure further investment stability. External expertise and investment are necessary for Saudi Arabia to effectively establish a domestic mining sector to support electric vehicle manufacturing and to facilitate access to raw materials and minerals required for the energy transition. The introduction of a more codified legal system, particularly the Law of Evidence, Civil Status Law and the Civil Transactions Law, all introduced between 2021 and 2023, is likely to increase external business confidence but may face initial impediments due to limited judicial capacity. Most of the key economic diversification sectors selected as core pillars of the Vision 2030 program, such as mining, telecommunications, advanced manufacturing and banking, will require robust and institutionalized legal frameworks if they are to attract significant external investment. 

The neighboring United Arab Emirates and Bahrain also offer investment opportunities in the region. Saudi Arabia, however, has a strong base for improvement through 2030 and beyond due to its financial resources. The Public Investment Fund will likely continue as the main source of finance for many of the Vision projects; its assets increased to $940.26 billion in 2024 compared with $776.7 billion in 2023, and it has a stated target of $2.7 trillion by 2030.  

Malaysia’s annual GDP growth is expected to exceed 4% through 2035. This will not be enough to position the country among the world’s top 30 economies over the next decade, but strong growth momentum will continue, driven by exports, tourism and private consumption.  

To ensure Malaysia remains competitive, incumbent Prime Minister Anwar Ibrahim introduced the Madani Economic Framework in 2023. The framework seeks to reinforce domestic policies to attract foreign investment, leverage a promising GDP growth rate and navigate geopolitical uncertainties. The government has also streamlined policies via the New Industrial Master Plan 2030 and National Energy Transition Roadmap. Progress under the Madani Economic Framework is expected as long as political stability continues. While Malaysia’s strategic objectives and policy direction are unlikely to change, a new government may rebrand the framework following general elections in 2027. 

Malaysia is among the few emerging economies in Asia-Pacific seeking to catapult into high income status. With manufacturing’s share of GDP sustainably at over 20%, the country remains competitive alongside its peers, including Vietnam, Indonesia, and Thailand. However, a combination of domestic and external factors presents medium-term risks to Malaysia’s strategy. Global events in the post-COVID-19 environment have prompted supply chain reorientation from both outside the country and within Malaysia to more cost-competitive locations in Asia-Pacific. To reverse this trend, the Malaysian government has identified the need to upskill labor. 

Although labor compensation in Malaysia is higher than in Bangladesh, Cambodia, India, Thailand and Vietnam, the added value per employee in Malaysia is, on average, much higher than in those five countries. This means that Malaysia has a head start while other Asia-Pacific countries are trying to become more integrated, value-add players in the global high-value manufacturing sector.

According to Malaysia’s Department of Statistics, in 2023, more than 75% of manufacturing sector workers were “semi-skilled,” while only about 18% were “fully skilled.” The challenge for the country is to achieve a substantial transition in this split. There are three critical areas to watch to assess how well Malaysia can capitalize on its status as seasoned manufacturing powerhouse by enabling high-skilled labor to support the next frontier of economic development. 

• Prime Minister Anwar Ibrahim’s administration is likely to establish a more direct link between public and private sector companies, with an approach that accommodates preferences of the private sector. This will likely ensure that Malaysia’s approach to bridging the skill gap and upskilling is informed by industry needs and delivered in cooperation.

• Upskilling and reskilling efforts are likely to occur across the value chain of small and medium domestic industries and in education. The government in 2024 has so far publicly earmarked about $45 million for vocational training and upskilling through the Skill Development Corp., aiming to create a wider pool of high-skilled labor and improve labor mobility.

• The government’s foreign policy approach will likely emphasize the strong link between trade and trust, positioning Malaysia in international investment negotiations as capable of working with a range of countries and international companies to engage in manufacturing in sensitive sectors.

The establishment of ambitious long-term growth goals by emerging markets provides a clear roadmap for progress. These goals indicate that policymakers are planning for the future, identifying vulnerabilities and prioritizing strategic areas for growth that require capital mobilization and private investment. 

However, setting long-term growth plans and ambitions is only the first step toward achieving emerging markets' growth potential. The experiences of countries such as South Africa, Saudi Arabia and Malaysia illustrate the risks and opportunities that emerging markets may have to navigate to reach their growth objectives. Political willingness to move forward, access to capital, resilient macroeconomic fundamentals, and improvements in regulatory frameworks, infrastructure and skill development will determine how emerging markets can maximize their growth potential over the next decade.

¹ This diagram is based on a Strategic Opportunity Index™ (SOI™) that utilizes S&P Global Market Intelligence data to provide a comprehensive and comparable view of more than 90 markets, covering more than 98% of global GDP. The SOI™ measures the state of a market and its potential to generate opportunity for enterprise. It encompasses a range of factors that make a market attractive and viable for enterprise. The data provides users with current and historical insights on the economic, regulatory, policy, institutional, logistics, supply chain, trade and resource questions through harmonized data. These data are organized into aggregated pillars of the SOI™ framework that speak to the five key drivers of the macro environment: market potential, policy favorability, institutional quality, logistics efficiency and resource availability. These scores are compiled with data as of June 5, 2024. Market potential measures the extent to which the domestic market is open, innovative and attractive for new business opportunities. Policy favorability measures the extent to which government policies, regulations and tax code support and encourage new enterprise. Institutional quality measures the strength and effectiveness of a country’s institutions, including legal and financial institutions. Logistics efficiency measures the effectiveness and reliability of a country’s logistics and supply chain infrastructure. Resource availability measures the accessibility and adequacy of the necessary resources for conducting business operations in a given market, specifically finance and labor.

² The Strategic Opportunity Index™ (SOI™) Momentum Score measures how the markets have changed over the past 10 years from the perspective of the index. Momentum scores are calculated from the growth rates (CAGRs) and are normalized to provide a comparable score that focuses on the trajectory of the country, regardless of the current SOI™ ranking. The markets that have improved the most are ranked the highest on momentum scores. This approach lets users understand and identify markets where opportunities are expanding.