ASEAN+3 region poised to grow stronger in 2024
Spiking global commodity prices remains the key risk to growth, but there are several other wildcards. For one, we still cannot rule out a US recession
Daily TribuneSpiking global commodity prices remains the key risk to growth, but there are several other wildcards. For one, we still cannot rule out a US recession
Today, the ASEAN+3 Macroeconomic Research Office maintained its 2024 growth forecast of 4.5 percent for the ASEAN+3 region in its January quarterly update of the ASEAN+3 Regional Economic Outlook. Strong domestic demand amid moderating inflation and continuing improvement in trade will propel growth 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 the previous quarter’s forecast of 5.0 percent. Stabilizing industrial and service activities in the Chinese economy will help to provide additional momentum to the region in 2024, alongside gradual improvement in exports to other key markets.
“The recovery in the global tech cycle is starting to be felt in the region’s export performance, especially for electronics,” said AMRO chief economist Hoe Ee Khor. “But non-tech exports are lagging in recovery, so recent manufacturing sentiment surveys are relatively mixed.”
Price pressures continue to recede across member economies, mirroring global commodity price trends. 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.
“Spiking global commodity prices remains the key risk to growth, but there are several other wildcards. For one, we still cannot rule out a US recession,” Khor cautioned. “The lead-up to the US election in late 2024 could also exacerbate policy uncertainty and volatility in financial markets.”
AMRO estimates that this year’s recession in the US and euro area could slash the region’s GDP growth by half. The negative impact on the region’s growth would be amplified if the momentum in China’s economic recovery weakens in tandem.
