Amid Domestic Recovery, Caution Persists in 2023
Central Banks to Follow Fed in Stopping Rate Hikes
Economic activity has resumed as COVID-19 infection subsides, and the economies of Asian countries are generally on a recovery trend. In 2023, growth is expected to decelerate due to the slowdown of the global economy centered on the United States, but the recovery of domestic demand in the five ASEAN countries will support their economies, and they are expected to maintain their relative strength on the world stage. The U.S. Federal Reserve has begun slowing down its interest rate hikes, and the central banks of Asian countries are expected to follow suit, with a possible suspension of interest rate hikes in 2023. The inflation rate is also expected to peak in 2022 and turn to a downward trend. External factors such as the U.S. economy, the Chinese economy, and the direction of the Ukraine war are attracting attention.
The Japan Center for Economic Research and Nikkei conducted the twenty-eighth quarterly consensus survey on Asian economies from November 25 to December 15, asking about the economic outlook for 2022-2024. It collected 34 answers from economists and analysts in the five largest members of the Association of Southeast Asian Nations—Indonesia, Malaysia, the Philippines, Singapore, and Thailand—and in India.
Economists’ average forecast of the economic growth rate of the five ASEAN countries in 2022 is 5.3%, an upward revision of 0.3 points from the previous survey (Table 1). Third quarter 2022 results generally exceeded expectations, and the resumption of domestic economic activity has led to upward revisions to the outlook through the second quarter of 2023 in many countries. The growth rate of the five countries in 2023 will slow to 4.3%, but there is no revision from the previous survey, and it is expected to remain firm. GDP is expected to grow 4.6% in 2024.
India's growth rate for fiscal 2022 is expected to remain at a relatively high level of 6.8%, although it has been revised downward by 0.2 points from the previous survey. It is expected to slow to 5.6% in fiscal 2023, a downward revision of 0.4 points. There is a growing view that slowing growth in the global economy, especially in the U.S. which is a major export destination, will have an impact on India. It is expected to return to the 6%-range again in 2024 at 6.5%.
The outcome of this survey was also reported at Nikkei Asia. (December 26, 2022)
◆ Main points of the survey
- The average 2022 growth rate forecast of five ASEAN countries is 5.3%, an upward revision of 0.3 points from the previous survey in September. The ASEAN growth rate is expected to slow to 4.3% in 2023, unchanged from the previous survey. India’s growth rate forecast in fiscal 2022 is 6.8%, revised downward by 0.2 points, and the outlook for fiscal 2023 is revised down 0.4 points to 5.6%.
- As domestic demand in Asia recovers, a somewhat pessimistic mood persists in the global economy, including in the United States. In December, the U.S. Federal Reserve lowered its 2023 U.S. economic growth forecast to 0.5% from September’s 1.2%. The IMF in October lowered its GDP forecast for 2023 to 2.7% from July’s 2.9%, citing Russia’s invasion of Ukraine, inflation pressure, and the slowdown of the Chinese economy.
- The Fed slightly revised its tightening policy by easing the pace of interest rate hikes in December. It is expected that the central banks of Asian countries will follow the Fed. Economists expect Asian countries to stop raising interest rates in 2023, with some countries to cut interest rates.
Indonesia: Dendi Ramdani, head of industry and regional research department, Bank Mandiri; Umar Juoro, senior fellow, The Habibie Center; Wisnu Wardana, chief economist, PT Bank Danamon Indonesia Tbk.; Juniman, chief economist, Maybank Indonesia
Malaysia: Suhaimi Ilias, chief economist, Maybank Investment Banking Group; Wan Suhaimie bin Wan Mohd Saidie, head, economic research, Kenanga Investment Bank; Vincent Loo Yeong Hong, senior economist, KAF Research; Mohd Sedek Jantan, head of wealth research & advisory, UOB Kay Hian Wealth Advisors Sdn. Bhd.
Philippines: Ina Judith Clabio, research and business analytics officer, Metrobank; Carlo Asuncion, chief economist, Union Bank of the Philippines; Jojo Gonzales, managing director, Philippine Equity Partners Inc.; Mitzie Conchada, associate dean, school of economics, De La Salle University; Nicholas Mapa, senior economist, ING Bank Philippines
Singapore: Manu Bhaskaran, CEO, Centennial Asia Advisors; Randolph Tan, director, Centre for Applied Research, Singapore University of Social Sciences
Thailand: Poonyawat Sreesing, senior economist, Siam Commercial Bank – Economic Intelligence Center; Lalita Thienprasiddhi, senior resercher, Kasikorn Research Center; Krungsri Research Team, Bank of Ayudhya PCL; Amonthep Chawla, head of research, CIMB Thai Bank
India: Punit Srivastava, head of research, Daiwa Capital Markets India; Dharmakirti Joshi, chief economist, CRISIL; Tirthankar Patnaik, chief economist, National Stock Exchange of India; Aurodeep Nandi, India economist, Nomura India
For multiple countries: Euben Paracuelles, chief economist, Nomura Singapore; Brian Tan, Regional economist, VP, Barclays Bank, Singapore; Shreya Sodhani, regional economist, Barclays Bank, Singapore; Rahul Bajoria, director, regional economist, Barclays Bank
Chinese Downturn Threatens; U.S. Rate Hikes Persist
JCER/Nikkei Consensus Survey on Asian Economies June 2023 issue 2023～2025
China Ends Restrictions; U.S. Financial Turmoil
JCER/Nikkei Consensus Survey on Asian Economies March 2023 issue 2023～2025
Central Banks to Follow Fed in Stopping Rate Hikes
JCER/Nikkei Consensus Survey on Asian Economies December 2022 issue 2022～2024
2023 Forecast Revised Down, Growing Concerns on China
JCER/Nikkei Consensus Survey on Asian Economies September 2022 issue 2022～2024
Inflation, Weak Currencies Push Central Banks to Raise Rates
JCER/Nikkei Consensus Survey on Asian Economies June 2022 issue 2022～2024