ASEAN Market Projections Up Despite Recent Market Decline

Despite a recent market decline, the ASEAN economic outlook remains robust, with higher growth projections for 2024. The region is expected to grow at 4.5% this year, outpacing the global growth rate of 2.7%. This higher economic growth, driven by domestic demand, export turnaround, and tourism recovery, will enhance ASEAN's resilience in 2024. The region's defensive safe haven status, coupled with its better economic performance, will attract investors seeking stability and consistent growth.



In 2024, ASEAN is expected to benefit from interest rate cuts and a stronger currency relative to the USD. As inflation falls and global interest rates peak, ASEAN central banks are likely to lower their benchmark rates, reducing borrowing costs and improving valuation premiums. This, coupled with a weaker USD, will strengthen ASEAN currencies, attracting more inflows into the region's markets.

The recovery of international visitors and tourism is expected to contribute significantly to ASEAN's economic growth in 2024. According to Lion Global Investors, visitor arrivals to ASEAN have recovered to around 70-80% of pre-pandemic 2019 levels by the end of 2023. This recovery, coupled with pent-up demand for services post-pandemic, is driving economic growth in the region. As tourism recovers, it will boost domestic consumption, government fiscal spending, and the manufacturing sector, further propelling ASEAN's GDP growth in 2024.

Despite recent market declines, ASEAN's trade-dependent economies are expected to benefit from a turnaround in manufacturing output and exports in 2024. This turnaround is driven by technology and electronics replacement cycles, aggressive US fiscal spending, and generous subsidies in sectors like semiconductors and electric vehicles. This should particularly benefit Singapore, Thailand, Vietnam, and Malaysia, boosting their trade-dependent economies.



In conclusion, the ASEAN market projections remain upbeat despite the recent market decline. The region's higher economic growth, interest rate cuts, stronger currency, and tourism recovery are expected to drive resilience and attract investors in 2024. As the region continues to grow and adapt to global trends, it remains an attractive destination for investors seeking stability and consistent growth.