The Asia-Pacific (APAC) region, a vibrant economic powerhouse, continues to demonstrate resilience and robust growth despite global economic uncertainties. The region’s economic outlook for 2024 remains promising, with a forecasted continuation of rapid economic expansion, underpinned by strong domestic demand in several large Asian emerging markets, including mainland China, India, Indonesia, Malaysia, and the Philippines.
A Resilient Economic Powerhouse
In 2023, the APAC region’s economic growth strengthened, reaching an estimated pace of 4.5% year-over-year (y/y), a significant increase compared to the GDP growth of 3.3% in 2022. This upturn in growth momentum was supported by an improvement in Japan’s economy and continued rapid economic expansion in India.
The region’s economic resilience is further demonstrated by the expected continuation of strong foreign direct investment inflows into India and some ASEAN nations. This trend is driven by multinational companies diversifying their manufacturing supply chains.
The Role of Exports and Tourism
The APAC region is also expected to see an upturn in merchandise exports in 2024, following a significant downturn in 2023. This recovery is crucial as exports of goods play a significant role in the economies of many Asian industrial nations.
Tourism, another vital sector for many nations in the region, is expected to continue its recovery in 2024. International tourism flows are anticipated to normalize to pre-pandemic levels in many countries, further bolstering the region’s economic growth.
Challenges and Opportunities
Despite the promising outlook, the APAC region faces challenges. The IMF projects growth to slow to 4.2 percent in 2024 and 3.9 percent in the medium term, due to China’s structural slowdown and lower productivity growth in many other countries. However, non-OECD Asian countries could benefit from the trade diversion effects of “friend-shoring”.
What is the APAC region?
The Asia-Pacific (APAC) region refers to the part of the world near the western Pacific Ocean. The region includes East Asia, South Asia, Southeast Asia, and Oceania.
What is foreign direct investment (FDI)?
Foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country.
What is ASEAN?
The Association of Southeast Asian Nations (ASEAN) is a regional intergovernmental organization comprising ten countries in Southeast Asia.
What is “friend-shoring”?
“Friend-shoring” refers to the practice of moving jobs or certain business functions to countries that have close cultural, geographic, or economic ties to the home country.
What is the significance of merchandise exports for the APAC region?
Merchandise exports play a significant role in the economies of many Asian industrial nations. They contribute to GDP, employment, and overall economic growth.
What is the impact of tourism on the APAC economy?
Tourism is a vital sector for many nations in the APAC region. It contributes to GDP, creates jobs, and stimulates growth in related industries. The recovery of international tourism flows to pre-pandemic levels is expected to further bolster the region’s economic growth.