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THE Asean+3 Macroeconomic Research Office (Amro) has maintained its 2024 growth forecast of 4.5 per cent for the Asean+3 region as improving external sector lends further support to resilient domestic demand.
Chief economist Hoe Ee Khor said strong domestic demand amid moderating inflation and continuing improvement in trade will propel growth, despite global outlook uncertainties.
“Exports have picked up towards the end of last year, retail sales volume and headline inflation moderated further in the fourth quarter of 2023.
“Therefore, we are quite confident that growth this year will be driven by domestic spending and stronger exports,” he told a virtual media briefing in a January quarterly update of the Asean+3 Regional Economic Outlook (AREO) here today.
Asean+3 consists of 10 Asean member states, plus China, Japan, and South Korea.
Hoe said the region is expected to record a full-year growth of 4.4 per cent in 2023, slightly higher than AMRO’s previous projection in October 2023 of 4.3 per cent to reflect the higher 5.2 per cent growth for China, up from last quarter’s 5.0 per cent forecast.
He said stabilising industrial and service activities in the Chinese economy are helping to provide additional momentum to the region in 2024, alongside gradual improvement in exports to other key markets.
China’s gradual property recovery and the anticipated return of tourism to pre-pandemic levels would also support regional growth, he said.
“The recovery in the global tech cycle is starting to be felt in the region’s export performance, especially for electronics. However, exports are lagging in terms of recovery, which is why recent manufacturing sentiment surveys are relatively mixed,” he said.
Hoe said headline inflation is likely to continue to moderate in 2024 at 4.4 per cent compared with 6.6 per cent in 2023.
He said this is consistent with moderating global commodity prices and tighter monetary conditions, thus putting less pressure on central banks to adjust the key rates.
He pointed out that Asean is expected to record a 4.9 per cent growth this year, slightly lower than 5.0 per cent projected earlier, amid an improved export landscape, stronger domestic consumption, and investments.
“Asean is an open economic region that depends on manufacturing exports, but there has been a drag on growth last year (due to the external headwinds),” he said.
The drag is expected to diminish this year with inflation in Asean likely to moderate to 5.3 per cent from 8.3 projected for 2023.
Among Asean member countries, AMRO has revised downward Malaysia’s 2024 gross domestic product (GDP) to 5.0 per cent from 5.2 per cent projected in October 2023.
Similarly, Singapore’s projected GDP has been reduced to 2.6 per cent from 2.9 per cent, Thailand’s 3.3 per cent from 3.9 per cent, the Philippines’ 6.3 per cent from 6.5 per cent, and Laos’ 4.7 per cent from 5.0 per cent.
AMRO, however, revised upward its projection for Brunei’s 2024 GDP to 2.4 per cent from 2.0 per cent and Myanmar’s 3.2 per cent from 2.8 per cent. It maintained its forecast for Cambodia, Indonesia and Vietnam at 6.2 per cent, 5.2 per cent, and 6.0 per cent, respectively. - Bernama
