ASEAN+3 Growth Momentum Steady on Export Recovery, Solid Domestic Demand

SINGAPORE, July 16, 2024 /PRNewswire/ -- The ASEAN+3 Macroeconomic Research Office (AMRO) has kept its 2024–25 growth forecasts for the ASEAN+3 region broadly unchanged at 4.4 percent and 4.3 percent, respectively, in its latest quarterly update of the ASEAN+3 Regional Economic Outlook (AREO). Favorable export prospects should boost the region's growth momentum, alongside firm domestic demand and the continued recovery in tourism.

This year, the ASEAN+3 region is expected to grow at a steady pace of 4.4 percent, compared with the forecast of 4.5 percent in April 2024. Domestic demand will be bolstered by strong employment conditions and stable prices, while exports growth is expected to return to positive territory on improving global demand. Growth in ASEAN is forecast to improve from 4.2 percent in 2023 to 4.8 percent this year, while the overall growth for the Plus-3 economies (China; Hong Kong, China; Japan; and Korea) is projected to remain stable at 4.4 percent.

AMRO expects the ASEAN+3 growth to ease slightly to 4.3 percent in 2025, as the regional economies converge to their trend growth. 

"The overall balance of risks to the region's outlook has improved since April," said AMRO Chief Economist Hoe Ee Khor. "Real estate aside, China's economy continues to grow robustly. Tourism has rebounded close to pre-pandemic levels for most economies in the region, and the global semiconductor recovery is broadening to benefit more economies and sectors in ASEAN+3."

Inflation in the ASEAN+3 region—excluding Lao PDR and Myanmar—is forecast to moderate to 2.1 percent in 2024, lower than the April forecast of 2.5 percent. However, downside risks to inflation remain, especially if geopolitical tensions worsen and trigger spikes in global commodity and shipping prices.

U.S.-related risk factors have become more salient. Higher-for-longer interest rate expectations in the U.S. have weighed on many of the region's currencies. ASEAN+3 asset markets could also see higher volatility in the run-up to the November presidential election, especially if the election campaign leads to a further escalation in U.S.–China trade tensions.

"The bad news is that the region's outlook next year could be significantly affected by the outcome of the U.S. elections. The good news is, the region has weathered similar shocks before," Khor said. "Our economies need to keep rebuilding policy space and pursue policies to enhance resilience to shocks."

AMRO's conclusions are found in the latest quarterly update of its flagship AREO report. The next update will be released in October.

About AMRO

The ASEAN+3 Macroeconomic Research Office (AMRO) is an international organization established to contribute toward securing macroeconomic and financial stability of the ASEAN+3 region, comprising 10 members of the Association of Southeast Asian Nations (ASEAN) and China; Hong Kong, China; Japan; and Korea. AMRO's mandate is to conduct macroeconomic surveillance, support regional financial arrangements, and provide technical assistance to the members. In addition, AMRO also serves as a regional knowledge hub and provides support to ASEAN+3 financial cooperation.

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SOURCE ASEAN+3 Macroeconomic Research Office (AMRO)