DBS: ASEAN-6 Economic Growth Predicted to Reach 4.7 Percent in 2024

Illustration. (Photo: Doc. Antara)

JAKARTA - DBS Macro Research predicts that the ASEAN-6 economy will recover and achieve annual growth of 4.7 percent in 2024, after slowing to 4.2 percent in 2023.

"Growth is increasing again, supported by the electronics cycle, which has reached its lowest point, and the recovery of tourism," said DBS Bank Senior Economist Radhika Rao in an official statement, quoted by Antara in Jakarta, Wednesday, January 11.

ASEAN-6, according to DBS research, refers to the six founding member countries of the Association of Southeast Asian Nations (ASEAN), namely Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Radhika explained that exports from ASEAN-6, especially electronics, are expected to experience recovery in 2024, after facing many challenges in 2023. Simultaneously, DBS Macro Research also estimates that the recovery in international travel and tourism will continue in 2024 but will be more moderate.

On the other hand, inflation in ASEAN-6 is expected to decline throughout 2023. DBS Macro Research sees that general inflation will be under control and within the target for countries that set inflation anchors.

"Food and fuel, which together contribute at least 50-60 percent to the consumer price inflation basket will be the key to regional inflation dynamics," said Radhika.

She also highlighted three important factors that will influence ASEAN policy in 2024, namely domestic inflation, financial stability and the outlook for global policy.

"Proactive monetary tightening, starting in 2022 and ending in 2023, helps maintain regional inflation expectations and buffers the aftereffects of supply disruptions," Radhika said.

In the region, Radhika said the delayed impact of cumulative monetary tightening would likely continue to contain core inflation pressures and promote price stability.

"Depending on external factors, the delayed impact of cumulative tightening will likely continue to contain core inflation pressures and promote price stability within the central bank's inflation target range in 2024. As a result, real interest rates return to positive territory in late 2023, led by Indonesia and Thailand, " she said.