The Philippines will move from the high inflation forecast this year as the ASEAN+3 Macroeconomic Research Office or AMRO is seeing a 3.6-percent inflation rate for 2024 versus the 2023 full-year inflation rate of 6.0 percent.

According to the AMRO Baseline Inflation Estimates and Forecasts 2023–24, the Philippines ranks 7th among the 10 countries of the ASEAN region to have the lowest inflation forecast for 2024.

Brunei Darussalam is forecast to have the lowest inflation at 1.7 percent, followed by Malaysia (1.9); Thailand (2.1); Vietnam (2.5); Indonesia (3.0); Cambodia (3.1); Singapore (3.7); Lao PDR (4.2); and Myanmar with the highest inflation rate forecast for 2024 at 8 percent.

For the +3 nations, China is forecast to have the highest inflation rate at 2.5 percent, trailed by Korea (2.2 percent) and Japan with the lowest at 1.1 percent.

“Inflation in the ASEAN+3 region — excluding Lao PDR and Myanmar — is forecast to moderate to 2.6 percent this year from an estimated 2.8 percent for 2023. However, upside risks to inflation remain salient, and core inflation continues to be high in many economies,” the AMRO forecast, published on Thursday, said.

According to its website, AMRO is an international organization established to contribute to the macroeconomic and financial resilience and stability of the ASEAN+3 region through surveillance, supporting regional financing arrangements, providing technical assistance, serving as a regional knowledge hub, and facilitating ASEAN+3 financial cooperation.

Overall growth

In terms of overall growth, AMRO maintained its 2024 growth forecast of 4.5 percent for the ASEAN+3 region due to foreseen strong domestic demand amid moderating inflation and continuing improvement in trade, despite uncertainties surrounding the global outlook.

“The ASEAN+3 region is forecast to end 2023 with a full-year growth of 4.4 percent, slightly higher than last October’s projection of 4.3 percent. The upward revision reflects the higher growth of 5.2 percent for China, up from last quarter’s forecast of 5.0 percent. Stabilizing 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,” AMRO has forecasted.

“The recovery in the global tech cycle is starting to be felt in the region’s export performance, especially for electronics. But non-tech exports are lagging in recovery, which is why recent manufacturing sentiment surveys are relatively mixed,” said AMRO chief economist Hoe Ee Khor.

Moreover, the forecast said that price pressures continue to recede across member economies, mirroring global commodity price trends.

“Spiking global commodity prices remains the key risk to growth, but there are several other wild cards. We still cannot rule out a US recession, for one. The lead-up to the US election in late 2024 could also exacerbate policy uncertainty and volatility in financial markets,” Khor cautioned.

Also, AMRO estimates that a recession in the United States and euro area this year could potentially slash the region’s GDP growth by half, adding that the negative impact on the region’s growth would be amplified if the momentum in China’s economic recovery weakens in tandem.