The Rise of Asia - New Economic Configuration: What are the Challenges for Mauritius?

The rise of Asia is reshaping the global economy. China, India, and the United States are establishing a new balance of power, prompting countries like Mauritius to reconsider their strategic positioning.

Signals of a gradual shift in the global economy are multiplying. A recent illustration is Elon Musk's republication of a graph based on projections from the International Monetary Fund (IMF), highlighting the growing contributions of China and India to global growth. According to this data, these two countries are expected to account for nearly 44% of the increase in global real GDP by 2026. This evolution reignites the debate on the redistribution of economic power and the necessary adjustments for small, open economies like Mauritius.

The graph, shared on platform X and originally published by World of Statistics, ranks the top ten contributors to global growth expected for 2026. China tops the list with an estimated contribution of 26.6%, followed by India at 17%. The United States ranks third with 9.9%, while other emerging economies, including Indonesia, Turkey, and Nigeria, appear in the lower half of the ranking. Together, China and India significantly surpass the combined contributions of most advanced economies, reflecting a trend observed for several years.

The latest IMF forecasts confirm this trend. For advanced economies, growth is expected to be 1.8% in 2026 and 1.7% in 2027. In the United States, economic activity is anticipated to grow by 2.4% in 2026, driven by an accommodative fiscal policy and a decrease in the federal funds rate, amid easing effects related to increased trade barriers. This improvement compared to previous forecasts is largely attributed to better-than-expected GDP performance in the third quarter of 2025, a rebound in activity at the start of 2026 following the end of the federal government shutdown, as well as some carryover effects.

In China, the outlook has also been revised upwards. Growth for 2025 is now estimated at 5%, supported by stimulus measures and an increase in bank lending aimed at boosting investment. For 2026, forecasts reach 4.5%, partly due to the reduction of effective U.S. tariffs on Chinese goods, following a one-year trade truce established in November, and economic support policies spread over two years. However, a slowdown to 4% is anticipated for 2027, due to more pronounced structural constraints.

India, on the other hand, continues to display strong momentum. Growth for 2025 has been revised to 7.3%, following better-than-expected results in the third quarter and an acceleration of activity towards the end of the year. For 2026 and 2027, moderation is expected, with growth around 6.4% as cyclical and temporary factors fade.

For many observers, these figures illustrate a shift in the center of gravity of global growth. While global average growth is projected at 3.1% in 2026, disparities between regions are becoming more pronounced. Emerging markets stand out, with expected growth rates of 6.2% for India, 4.9% for Indonesia, and 4.2% for China. In contrast, several advanced economies are expected to grow below the global average, facing challenges related to productivity and aging populations: 2.1% for the United States, 1.4% for the European Union, and 0.6% for Japan.

According to an operator in Mauritius, this configuration suggests that the next phase of the global economy will be largely influenced by demographics and domestic demand in Southern countries. The central question will no longer be just which economies are growing the fastest, but which can sustain growth. In this context, he believes that governments must anticipate this redistribution of economic power and adjust their strategies accordingly.

Another analyst identifies three major trends on the horizon for 2026. North America will remain a leading financial and investment hub, thanks to the depth of its financial markets, innovation, and consumption. Asia will continue its long-term ascent, driven by its demographic weight, the strength of its manufacturing base, and technology adoption. Europe, on the other hand, will face slower growth, hampered by demographic pressures, the costs of the energy transition, an innovation deficit, and declining productivity.

These developments could contribute to a more polarized global economy where rapidly growing economies widen the gap, while those with more moderate growth are encouraged to specialize, strengthen partnerships, or reassess their positioning. GDP rankings, he notes, are no longer just symbolic; they concretely influence multinational companies' location choices, infrastructure development, and the prioritization of trade corridors by states.

Sunil Boodhoo, former director of International Trade at the Ministry of Foreign Affairs, asserts that "strategic reflection at the highest level is necessary."

For Boodhoo, the United States will maintain a dominant position for several more years. With an estimated GDP of $30 trillion, the gap remains significant, even though recent American growth is approaching that of China. He stresses that the difference between the combined GDP of China and India and that of the United States is still about $5 trillion.

However, he acknowledges that the Chinese and Indian economies will continue to progress, noting that India could surpass Germany before 2030, while China's catch-up with the United States will take more time. He also points out that as a country develops, its growth rate naturally tends to slow down.

He believes that the European Union is gradually moving closer to other partners, as evidenced by its recent agreement with India. At the same time, relations between China and India, once marked by rivalry, are evolving towards greater cooperation. This reconfiguration of economic alliances poses specific challenges for Mauritius.

To benefit from this new environment, Sunil Boodhoo calls for strategic reflection at the highest level. He believes that Mauritius struggles to capitalize on emerging opportunities and is concerned about the potential effects of the agreement between India and the European Union, which could weaken the country’s access to the European market. Although Mauritius has trade agreements with India and Europe, he emphasizes the need to play a bridging role between these two economic blocs. Without a clear and coordinated strategy, the risk is that the country will lose its competitiveness in a rapidly changing global context.