APAC Economic Resilience: A Positive Outlook for 2024

As of January 2024, the Asia-Pacific (APAC) region stands as the beacon of economic growth, poised to lead the world economy in 2024. This anticipated prosperity is underpinned by robust domestic demand in East Asia and India, marking a continuation of the rapid expansion witnessed in 2023.

GDP Growth and Key Factors:

The APAC region experienced a commendable GDP growth rate of 4.5% year-over-year (y/y) in 2023, surpassing the 3.3% recorded in 2022. Notable contributors to this upswing were mainland China, Japan, and India. In 2024, the economic outlook remains optimistic, driven by resilient domestic demand in major emerging markets such as mainland China, India, Indonesia, Malaysia, and the Philippines.

Foreign direct investment inflows are expected to sustain momentum, particularly into India and select ASEAN nations, as multinational corporations diversify their manufacturing supply chains. The region anticipates a rebound in merchandise exports, especially in electronics and new electric vehicles (EVs), aligning with the recovery in global demand.

Economic Highlights by Country:

1. Mainland China: Despite a projected moderate economic expansion, private consumption is set to drive growth in 2024. Improved retail sales and positive manufacturing conditions signal a positive trajectory.

2. Japan: Buoyed by the service sector, Japan’s GDP growth strengthened in 2023. Continued expansion is forecast, albeit with a focus on service-driven growth.

3. South Korea: Exports rebounded in December, driven by semiconductors and electric vehicles. The manufacturing sector is showing signs of stabilization after a 16-month decline.

4. Taiwan: Exports, particularly in information and communication products, showcased recovery in the second half of 2023. The manufacturing sector, however, indicates moderate contraction.

5. Indonesia: A growth rate of around 5% in 2023 is estimated to persist in 2024, propelled by robust private consumption and foreign direct investment inflows.

6. Singapore: Despite a slower growth rate in 2023, the private sector remains robust, with incoming new business signaling strong demand conditions.

7. Malaysia: Resilient economic expansion at around 4% in 2023 is expected to continue, although manufacturing conditions remain challenging.

8. Philippines: Strong economic growth in 2023 is set to continue in 2024, supported by an anticipated easing of monetary policy.

9. India: Boasting a buoyant GDP growth rate, India’s manufacturing sector shows strength, particularly in the production of infrastructure goods and consumer durables.

Medium-Term Outlook:

The APAC region’s medium-term outlook remains positive, driven by resilient domestic markets, global competitiveness in electronics manufacturing, and the burgeoning electric vehicle sector. Continued trade liberalization through agreements like RCEP and CPTPP, coupled with the recovery of international tourism, positions the region as a key player in the global economy over the next decade.