With clouds on the horizon, S-E Asia well positioned in 2024

WITH 2023 in the rear-view mirror, many of the challenges that had an impact on global markets last year will likely be a key focus for at least the first half of the new year, before major economies face a more protracted slowdown.

The first factor that we are likely to see remain little changed as the new year begins is the high global interest rates environment as inflation remains sticky, although it is declining due to the measures employed by central banks across the world. However, the shift towards more normalised levels of inflation has taken longer than most expected; and so, policy measures to maintain downward pressure on inflation will likely continue well into 2024.

Thus, we do not see policy measures shifting any time soon. This will present a challenge in the near term, when we will continue to see high interest rates, but growth beginning to slow more rapidly. Many economies surprised on the upside in 2023, recording growth levels that were higher than consensus. However, the hangover of high interest rates combined with the ongoing challenges on the geopolitical front will likely mean growth stagnating and declining this year.