08 November 2023
The Organisation for Economic Co-Operation and Development (OECD) recently updated numerous economic and inflation projections for 2023 and 2024. In this article, we will look at the updated forecasts for the leading APAC economies in what are fast-changing times.
However, before we look at the figures in detail, the projected global GDP growth for 2023 is forecast to come in at around 3%, falling slightly in 2024 to 2.7%. Average headline inflation expectations for the G20 economies come at 6% in 2023 and just under 5% in 2024. So, how do the APAC economies compare to this?
Along with the US, China is one of the most influential economies in the world and tends to lead the way in the APAC region. The Chinese economy is expected to grow by 5.1% in 2023 and 4.6% in 2024. Headline inflation will likely fall to around 0.6% at the end of 2023 before rising to 1.2% in 2024.
The Japanese economy has shown signs of recovery in recent months, although growth expectations in 2023 are just 1.8%, with the economy expected to slow in 2024 to an increase of just 1%. Interestingly, after a period of low inflation (deflation), Japanese headline inflation is expected to be 3% by the end of 2023, falling to 2% in 2024.
India is forecast to be one of the strongest economies in 2023, expected to grow by 6.3%, and a slower but still impressive 6% in 2024. While inflation has been a problem, it will likely drop to around 5.4% by the end of 2023 and fall further to about 4.8% in 2024. Are the authorities finally getting inflation under control?
There are high expectations for the Indonesian economy in the short, medium and longer term, expected to be one of the strongest not only in the APAC region but on a global basis. This is supported by OECD economic growth expectations of 4.9% for 2023 and 5.2% for 2024. After a spike in 2022, headline inflation is expected to fall to around 3.8% in 2023 and 2.8% in 2024.
The Australian economy has come under pressure in recent months, with the economy expected to grow by just 1.8% in 2023 and 1.3% in 2024. Australia has suffered from relatively high headline inflation, which ended 2022 at 6.6% but is forecast to fall to around 5.5% in 2023 and just 3.3% in 2024.
Looking towards the US, the UK and Europe, it does appear that interest rates are at or near their peak. However, they are expected to remain relatively high for the next couple of years as central banks finally (we hope) take control of inflation. Unfortunately, the US, UK and European economies could dip into recession in the short to medium term, with the constant spectre of inflation dictating interest rates for the foreseeable future.
While India, China and Indonesia are forecast to post economic growth well in advance of the G20 emerging economies average, the region as a whole is expected to fare relatively well compared to economies wider afield. Economic prospects would have been a little rosier if inflation was not so stubbornly high globally. These are interesting times but who would be an economic forecaster!Back to News