Southeast Asia Outlook 2024

Southeast Asia Outlook 2024: Opportunity Beckons

CUSHMAN & WAKEFIELD

INFLATION CONCERNS TO RECEDE

Source: Moody’s Analytics, Cushman & Wakefield Research

SIGNS OF OPTIMISM INFLATION AND INTEREST RATES EXPECTED TO COOL

THE END OF INTEREST RATE HIKES

COUNTRY Philippines Singapore Indonesia

TYPE

Overnight Lending Rate

Inflation concerns are expected to recede in SEA, with inflation poised to fall across most markets. The effects of supply chain disruptions and energy price shocks have receded. Also, with US interest rates cuts expected in 2024, devaluation pressures on SEA currencies have eased, leading to stabilising import prices and cooling inflation. Nonetheless, inflation risks remain due to potential oil and food price shocks given global geo political tensions. Singapore, Thailand and Philippines are net energy importers. And SEA has a high dependency on soybeans and wheat imports. Most SEA wheat imports are from Russia and Ukraine. Over the short term, the risk of a sharp and prolonged economic downturn have come down significantly. With inflation slowing, there is more leeway for monetary authorities to loosen financial conditions, if necessary, to support economic growth and mitigate potential downside risks. In a bid to boost growth, Vietnam’s central bank has already started to cut policy rates in 2023, with another cut potentially on the cards in 2024. That said, most central bankers have so far (as of end Jan 2024) announced intentions to hold rates steady and are adopting a watch and wait approach.

SORA- Overnight

Central Bank Policy Rate Central Bank Policy Rate

Thailand Vietnam Malaysia

Refinancing Rate Central Bank Rate

Source: Moody’s Analytics, Cushman & Wakefield Research

6

7