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The Asian Development Bank (ADB) released its July 2024 regional economic outlook report, indicating that Asia’s economy in the first half of 2024 was supported by strong domestic demand and a continuous recovery in exports, particularly in the electronics sector. The Asia’s economy is expected to grow by 5% in 2024, slightly decreasing to 4.9% in 2025.
The Southeast Asia’s economy, or ASEAN, continues to recover, driven by both domestic and international demand. Consumer spending is positively influenced by stable prices and improved tourism. The overall ASEAN economy is projected to grow by 4.6% in 2024 and increase to 4.7% in 2025, supported by the recovery of industrial exports and government infrastructure spending. However, tightening monetary policies pose a potential downside risk.
Indonesia’s economy is expected to grow by 5% in 2024-2025, primarily driven by government spending, which compensates for the negative impact of fluctuating and declining commodity prices on export demand. Malaysia’s economy continues to recover, expanding by 4.7% in the first quarter of 2024, due to private consumption, continuous labor market recovery, and improved private sector investments, particularly in machinery and equipment. The tourism sector also shows clear signs of recovery.
The Philippines’ economy is experiencing significant growth driven by the recovery of international trade, household spending, remittances from overseas Filipino workers, and the resurgence of the tourism and Business Process Outsourcing (BPO) sectors. The Philippines’ economy is projected to grow by 6% in 2024 and increase to 6.2% in 2025.
Singapore’s economy continues to recover moderately, expanding by 2.7% in the first quarter of 2024, driven by the services sector and domestic consumption. The economy is expected to grow by 2.4% in 2024 and increase to 2.6% in 2025.
Viet Nam’s economy remains robust, driven by both exports and domestic consumption. Exports grew by 6.4% in the first half of 2024. The financial sector has significantly supported economic recovery, with global demand for electronics boosting Viet Nam’s export growth. Fiscal measures, including a 2% reduction in value-added tax, have further stimulated growth. Viet Nam’s economy is expected to grow by 6% in 2024 and increase to 6.2% in 2025.
The ADB indicates that Thailand’s economy benefits from the continuous recovery in tourism and private consumption. However, consumer confidence might decline due to a potential slowdown in recovery. Thailand’s economy is projected to grow by 2.6% in 2024 and increase to 3% in 2025.
Inflation rates in Southeast Asia are expected to stabilize due to reduced food price pressures, despite ongoing oil price volatility. Thailand’s inflation rate is projected to be 1% in 2024. In contrast, inflation in Myanmar and Laos is expected to rise due to product shortages. While ASEAN’s economy is recovering, risks from the uncertain economic conditions of non-regional trading partners remain a concern.
Author:
Mr. Wimon Punkong
Deputy Executive Director (Academic)
International Institute for Trade and Development (Public Organization)
www.itd.or.th
Publication: Bangkok BIZ Newspaper
Section: First Section/World Beat
Volume: 37 Issue: 12691
Date: Wednesday, Jul. 24, 2024
Page: 8 (bottom right)
Column: “Asean Insight”
