COUNTRIES in South and East Asia and the Pacific, including the Philippines, are expected to buck the global trend and post either moderate or strong GDP growth this year, according to the latest report of the World Economic Forum (WEF).
In its Chief Economists Outlook for January 2024, WEF said South Asia and East Asia and the Pacific will see the “most buoyant economic activity” in 2024.
This is amid the increased risk of shocks and geopolitical rifts that could heighten global economic volatility that are expected to worsen in Africa, the Middle East, and Latin America.
“Chief economists continue to see the most buoyant economic activity in the economies of Asia, although no region is slated for very strong growth in 2024,” the WEF report said.
Based on the report, some 56 percent of Chief Economists expect East Asia and the Pacific to post moderate growth, while 41 percent expect the same level of growth in South Asia.
The data showed 30 percent of Chief Economists project East Asia and the Pacific to post strong growth while it was higher at 52 percent in South Asia.
Only 15 percent of respondents expect East Asia and the Pacific to post weak GDP growth in 2024 and much less (7 percent) of them estimate that South Asia will post weak growth.
“The outlook for South Asia and East Asia and Pacific remains positive and broadly unchanged compared to the last survey, with 93 percent and 86 percent expecting moderate or stronger growth for South Asia and East Asia and Pacific, respectively,” the report stated.
However, WEF said China is considered the exception, given that a smaller majority or 69 percent of Chief Economists expect it to post moderate growth.
This is on the back of weak consumption, lower industrial production, and property market concerns that would weigh on the prospects of a stronger economic rebound.
“Amid accelerating divergence, the resilience of the global economy will continue to be tested in the year ahead. Though global inflation is easing, growth is stalling, financial conditions remain tight, global tensions are deepening and inequalities are rising—highlighting the urgent need for global cooperation to build momentum for sustainable, inclusive economic growth,” WEF Managing Director Saadia Zahidi said in a statement.
The report also said inflation is expected to ease, signaling the end of the tightening cycle.
In East Asia and the Pacific, 4 percent of Chief Economists expect inflation to be very low and 26 percent said inflation will be low.
Another 4 percent said inflation will be high, while the bulk of respondents or 67 percent said inflation will be moderate in East Asia and the Pacific.
WEF said this will translate to “evolving monetary policy patterns.” In the United States, the Federal Reserve communication is “dovish” in its December 2023 meeting.
However, given the risks, WEF expects policymakers to be more cautious in terms of monetary policy. These risks include the escalation of regional conflicts, excessive redundancy and rising climate volatility.
One example of climate volatility is the arrival of the El Niño phenomenon which, WEF said, could alone increase global food prices by up to 9 percent.
“The unusually high degree of uncertainty over economic and financial developments means the timing and extent of easing will pose a dilemma for policymakers that continue to navigate trade-offs between tightening too much and too little,” WEF said.
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