China, Vietnam drag down Asean+3 economic growth forecast

This year’s growth forecast for the Asean plus three economies – China and Hong Kong, Japan and South Korea – has weakened from 4.4 per cent to 4.2 per cent, “primarily due to adjustments for China and Vietnam”, according to the Asean+3 Macroeconomic Research Office (Amro).

The Singapore-based macroeconomics forecasting organisation revised its 2024 growth expectations for China from 5.3 per cent to 5 per cent and for Vietnam from 6.3 per cent to 6.2 per cent “Asean+3 Regional Economic Outlook (AREO)” report released on Thursday.

And while the Association of Southeast Asian Nations (Asean) is expected to expand by 4.7 per cent in 2024, the plus-three economies are projected to grow by only 4.1 per cent overall, the report said.

“Growth for the region will be driven by continued recovery in external trade, resilient domestic demand, and a boost in tourism due to relaxed visa policies in some economies,” the report said.

But while China’s growth in the first half of the year puts it on track to achieve its annual gross domestic product growth target of “around 5 per cent”, the report also noted that slower growth in the second quarter had contributed to the lower forecasts.

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“Key factors include weaker than-expected US employment data, slower growth in China in the second quarter, August’s global financial markets turbulence, and the shifting dynamics in the upcoming US presidential election,” the report added.