ASEAN+3 GROWTH MOMENTUM STEADY ON EXPORT RECOVERY, SOLID DOMESTIC DEMAND

KUALA LUMPUR, July 16 (Bernama) -- The ASEAN+3 Macroeconomic Research Office (AMRO) has kept its 2024–25 growth forecasts for the ASEAN+3 region broadly unchanged at 4.4 per cent and 4.3 per cent, respectively.

Chief economist Hoe Ee Khor said favourable export prospects will help to boost the region’s growth momentum this year and the next, 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 per cent.

“Domestic demand will be bolstered by strong employment conditions and stable prices, while export growth is expected to return to positive territory on improving global demand,” he told a virtual media briefing on AMRO’s latest quarterly update on ASEAN+3 Regional Economic Outlook (AREO) today. 

According to Hoe, growth in ASEAN is forecast to improve to 4.8 per cent this year against 4.2 per cent in 2023, while the overall growth for the Plus-3 economies (China, Japan, South Korea) is projected to remain stable at 4.4 per cent.

Meanwhile, he said AMRO expects the ASEAN+3 growth to ease slightly to 4.3 per cent in 2025.

“The overall balance of risks to the region’s outlook has improved since April.

“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,” he added.

Hoe further noted that inflation in the ASEAN+3 region, excluding the Lao People's Democratic Republic (PDR) and Myanmar, is forecast to moderate to 2.1 per cent in 2024, lower than the forecast of 2.5 per cent in April, due to softer-than-expected food prices in several economies and lower imported inflation.

“Compared with April, 11 of 14 economies are now expected to see lower inflation rates this year. 

“However, downside risks to inflation remain, especially if geopolitical tensions worsen and trigger spikes in global commodity and shipping prices, “ he said.

He added that United States (US)-related risk factors have become more salient, with higher-for-longer interest rate expectations in the US weighing 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 the US-China trade tensions, he said.

“The region’s outlook next year could be significantly affected by the outcome of the US elections, but it has weathered similar shocks before.

“Our economies need to keep rebuilding policy space and pursue policies to enhance resilience to shocks,” he said.

-- BERNAMA