Asean economies – from slow start to potentially strong finish

AS 2024 winds down, South-east Asian economies appear set to finish the year quite differently from how it began. If little happens between now and then to upset the trajectory, it will be a turnaround story – from falling currencies, blistering inflation and slowing growth to recovery and resilience.

The year began on a rough note for many regional economies, including Indonesia, Malaysia, and Thailand as currencies tumbled owing to the US Federal Reserve’s aggressive interest rate hikes throughout 2023.

Pricing pressures sapped consumer spending and dragged growth down. And even as inflation began to abate, central banks were reluctant to slash rates and adopted other ways to support their currencies amid concerns of widening the rate differential with the US. Geopolitical tensions in the Middle East and uncertainties in the US-China ties further clouded the prospects for the region.