ASIATODAY.ID, JAKARTA – The Mastercard Economics Institute (MEI) released its annual report on the economic prospects for next year, outlining the positive aspects and things to watch out for that will affect global growth.
According to the Economic Outlook: Balancing Prices & Priorities report, although not all are the same, the Asia Pacific region is predicted to experience stable growth at a macro level, generally equivalent to the level in 2023, in line with the economy stabilizing and key growth factors such as exports and the tourism industry getting closer to normal. before the pandemic.
When looking deeper into each country’s economy, growth projections vary across regions. On the one hand, Singapore, Malaysia, the Philippines, Thailand, Taiwan and South Korea will experience an increase, while there is an anticipated slowdown in Australia, China, Japan and New Zealand. India and Indonesia are predicted to stabilize at levels similar to 2023.
Anticipate Changes in Spending
As the economic impact of the pandemic eases in 2024, consumers in Asia Pacific are expected to be able to allocate more of their disposable income to more optional spending, such as travel and entertainment. This is a change from the 2022-2023 period, where high inflation caused essential items such as food and fuel to take up a large part of household budgets, leaving little left for desirable things or extra expenses.
In 2024, consumer spending in Indonesia is expected to increase by around 5.5% compared to the previous year.
“2024 will be a time when consumers will readjust their spending. “Data shows that people remain enthusiastic about traveling and eating at restaurants, although the levels vary in each country,” said David Mann, Chief Economist, Asia Pacific, Mastercard, Friday, December 15 2023.
“Amidst these complex global conditions, the Mastercard Economics Institute helps clients explain macroeconomic forces down to the country, category or even company level, and provides advice on possible scenarios and their impact on demand.”
Indicating changes in demand, consumers across the Asia Pacific region are predicted to allocate more budget for purchasing goods in 2024 compared to the previous year. This marks the start of a new cycle that will return growth in spending on goods to pre-pandemic levels, reversing a trend that occurred in 2022-2023 when consumers prioritized services such as dining out and travel in response to the post-pandemic economic opening.
In 2024, increasing demand for goods such as household goods and clothing is also expected to revive the Asia Pacific manufacturing sector, which has a crucial role in the global economy.
This shift will encourage harmony in performance between the manufacturing and service sectors in the Asia Pacific region, which previously tended to go in opposite directions because the manufacturing sector experienced a slowdown and the service sector grew rapidly in 2023.
China International Travel
In 2024, China’s international travel recovery process will continue. The addition of more countries to China’s approved list for group travel, which generally have more flexible visa restrictions than individuals, will continue to support international tourism spending.
Recovery in specific corridors will depend on how authorities allocate flight capacity.
In 2023, destinations in Southeast Asia such as Singapore, Malaysia, Vietnam and Thailand will be the first to recover well. By 2024, destinations in Northeast Asia, North America and Europe are expected to catch up.
“The recovery in spending by Chinese tourists traveling abroad will continue to be monitored,” Mann said.
“Before the pandemic, tourists from mainland China tended to focus on shopping activities, especially luxury goods when they traveled abroad. However, following the pandemic, spending on experiences such as entertainment and dining has seen a more significant recovery among travelers departing from mainland China. These changes in travel spending priorities signal that tourism authorities and retailers around the world may need to adjust their strategies to maintain their appeal to visitors from China.”
Economic Outlook: Balancing Prices & Priorities focuses on analyzing 13 markets in Asia and Oceania only. This research relies on a variety of data, including Mastercard sales data collected and compiled anonymously, as well as various models that aim to project economic activity, both public and proprietary data. (AT Network)
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