Asia Macro Key Themes 2024: Region Still Facing Challenges

Asia will face another challenging year in 2024. A likely global slowdown will cap growth recoveries in the region. Mainland China in particular is likely to slow even further, with spillover effects for the rest of the region. Relief from monetary easing will come later, as we expect the Fed to only begin cutting in H2 2024, which will prevent most Asian central banks from cutting before then. While high interest rates should continue to weigh on foreign direct investment inflows, they should pose little threat to Asia’s fiscal health in the near term. Finally, six economies will head to important polls in 2024, but we think current policy trajectories should remain largely intact in the aftermath.