Heaptalk, Jakarta — Southeast Asia’s economy has the potential to be a standout region globally in 2024, with forecast enhancement rates for emerging markets poised to overtake some mature markets.
According to the latest Cushman and Wakefield report, the region’s economic growth is forecasted to attain about 4.6% in 2024, surpassing the 4.0% growth recorded in 2023. Southeast Asia’s economic resilience is expected to be primarily driven by robust private consumption, which, in turn, is fueled by low unemployment, steady consumer confidence, and pent-up demand. Private consumption typically contributes over 50% of GDP in emerging SEA markets.
Cushman and Wakefield Singapore and SEA Head of Research Wong Xian Yang revealed, “As the global economy navigates towards a soft landing, SEA is poised to lead Asia Pacific with outstanding enhancement forecast, specifically in its emerging markets. With a focus on GDP growth and robust activities in industrial and manufacturing, the region’s economic landscape presents promising opportunities for investors and businesses alike.”
While still elevated, inflation in SEA is projected to decrease further as supply chain disruptions continue to ease and energy prices stabilize. Anticipated US interest rate cuts are expected to alleviate devaluation pressures on SEA currencies, stabilize import prices, and contribute to cooling inflation across most regional markets.
Wong mentioned that easing inflation and financing costs present favorable conditions for higher investments in SEA. Anticipates global export, regional air travel recovery, and strong domestic demand are poised to enhance the region’s economic expansion this year, attracting investors to a rapidly developing area.
Key Sectors driving Southeast Asia’s progress
Excluding Singapore, the report disclosed that the region’s investment focus heavily favors the industrial sector, which comprises 47% of investment volumes, driven by optimism in new economy assets and sectors.
“Industrial capital values across SEA are forecasted to rise, and the annual industrial production in emerging SEA is projected to escalate over the next decade, with Vietnam spearheading growth due to its geographical proximity to China,” Wong added.
Meanwhile, global manufacturing activity is also poised for a rebound, benefiting SEA, where exports significantly contribute to GDP. He elaborated on Purchasing Managers indices (PMI), indicating a positive momentum in export-oriented countries like Singapore, Vietnam, and Malaysia. These indicators signal a strengthening of manufacturing set to boost this momentum further.
“This trend highlights these economies’ resilience and growth potential, positioning them for continued expansions in the coming year. An expected pick-up in global exports, continued recovery in regional air travel, and resilient domestic demand would bolster SEA in 2024,” Wong concluded.
