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Five Key Points from AMRO’s July 2024 ASEAN+3 Economic Outlook Update
Recovery is underway for the region’s goods exports. 12 economies are seeing higher export growth compared to the second half of 2023, buoyed by improving overseas demand and favorable export prices.
The ASEAN+3 region is forecast to grow at 4.4% in 2024 and 4.3% in 2025. Robust domestic demand, export recovery, improved tourism, and contained inflation support this growth outlook.
- Growth momentum continued to strengthen across ASEAN+3, anchored by resilient domestic demand.
- Recovery is underway for the region’s goods exports. 12 economies are seeing higher export growth compared to the second half of 2023, buoyed by improving overseas demand and favorable export prices.
- Inflation has seen a slight uptick since the April AREO assessment. Rising global energy and transportation prices have halted the broad decline in headline inflation across ASEAN+3.
- Overall, the ASEAN+3 region is likely to enjoy a steady recovery in the near term. The region is projected to grow at 4.4 percent this year, slightly lower than April’s forecast of 4.5 percent
- The overall balance of risks to the region’s outlook has improved since April. However, various risks could weigh on the baseline forecasts. U.S.-related risks have become more salient.
Projection of ASEAN+3 Economic Growth
The ASEAN+3 region is projected to grow at 4.4% in 2024 and 4.3% in 2025, maintaining the forecasts from April. Key contributors to this growth include favorable export conditions, strong domestic demand, and a sustained recovery in tourism. Inflation, excluding Lao PDR and Myanmar, is forecasted to be 2.1% in 2024, with a slight increase to 2.3% in 2025. These projections are part of AMRO’s July 2024 update of the ASEAN+3 Regional Economic Outlook (AREO).
Key Takeaways from the AMRO Report
The first notable observation is that growth momentum in ASEAN+3 continues to strengthen, driven by robust domestic demand. Retail sales have been buoyed by the recovery in travel and tourism, while improving export markets uplift business sentiment, albeit with some investment growth tempered by lingering economic uncertainties.
Additionally, the region’s goods exports are on the rise, supported by increasing overseas demand and favorable export prices, despite concerns over shipping disruptions. Travel and tourism are nearing pre-pandemic levels, thanks to favorable visa policies and the return of Chinese tourists.
Risks and Inflation Insights
Inflation in the region has seen a slight uptick due to rising global energy and transportation prices. Factors such as the conflict in the Middle East and shipping disruptions in the Red Sea have escalated crude oil and freight costs. Despite contained overall inflation, core inflation remains elevated due to strong domestic demand.
The overall economic outlook is positive, with steady growth projections; however, risks such as U.S. monetary policies and geopolitical conflicts could affect the baseline forecasts. Asset market volatility and commodity price spikes are potential challenges, alongside economic slowdowns in China, the U.S., and Europe impacting trade and investment.
Source: Five Key Takeaways from AMRO’s July 2024 ASEAN+3 Regional Economic Outlook Update
AMRO is an international organization that aims to contribute to securing the macroeconomic and financial resilience and stability of the ASEAN+3 region and its 14 member economies, including the 10 member states of ASEAN, China, Hong Kong, Japan, and Korea.
Disclaimer: AMRO Blog is a forum for the views of AMRO staff and officials on pressing economic and policy issues. The views expressed are those of the author(s) and do not necessarily represent the views of AMRO and its Executive Committee.
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