Southeast Asia Outlook 2024

Southeast Asia Outlook 2024: Opportunity Beckons

CUSHMAN & WAKEFIELD

A BETTER YEAR AHEAD RESILIENCE AMIDST UNCERTAINTY

The Southeast Asia (SEA) economy is expected to grow by 4.6% in 2024, faster than 2023’s growth of 4.0%. Most major economies in SEA are expected to accelerate in 2024, with exception to Indonesia, which would still see decent growth of 4.9% in 2024. SEA has weathered the heightened inflation and interest rate environment remarkably well. Private consumption, a key contributor to economic growth in SEA (private consumption typically contributes more than 50% of GDP in emerging SEA) has been resilient, supported by low unemployment rates, steady consumer confidence and pent-up demand.

Easing inflation and financing costs should be conducive for higher investments into SEA as investors look for higher returns in a fast-growing region. An expected pick-up in global exports, continued recovery in regional air travel and resilient domestic demand would bolster SEA growth in 2024. Nonetheless, uncertainties remain. This includes a slowing Chinese economy which drives about 15% of the regions’ exports, potentially escalating geo political conflict and oil prices, which could fuel higher inflation in net energy importer countries such as Singapore, Thailand and Philippines. Also, while there is continued optimism about the downward trend of global interest rates, the pace and timing of interest rate cuts remain uncertain. Interest rates in 2024 are likely to stay higher than pre-pandemic levels.

SEA ECONOMIC GROWTH LARGELY EXPECTED TO ACCELERATE

PRIVATE CONSUMPTION REMAINS RESILIENT AMIDST LOW UNEMPLOYMENT

8%

2023

2024F

2025-2030F AVERAGE

PRE-PANDEMIC AVERAGE (2015-2019)

8%

80%

6%

6%

60%

Thailand PRIVATE CONSUMPTION GROWTH (YOY%) 4% 2% 0%

4%

40%

20%

2%

0%

PROPORTION OF PRIVATE CONSUMPTION TO GDP

Vietnam

Malaysia

Philippines Indonesia

Singapore

GDP GROWTH (%)

0%

Proportion of Private consumption contribution to GDP Consumption Growth (Pre-pandemic Average 2015-2019) Consumption Growth (2023)

Vietnam Philippines

Indonesia Malaysia Thailand Singapore China

USA Euro Zone

KEY SEA ECONOMIES

Source: Moody’s Analytics, Cushman & Wakefield Research

Source: Moody’s Analytics, Cushman & Wakefield Research

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