SINGAPORE, January 17, 2023 – The ASEAN+3 Macroeconomic Research Office (AMRO) today revised downwards its short-term growth forecast for the ASEAN+3 region. Deteriorating global economic conditions are weighing on the region’s outlook, but China’s reopening last December should provide some counterbalance.
In its January Update, AMRO estimates ASEAN+3 growth for 2022 to come in at 3.3 percent — down from the 3.7 percent growth forecast in October. This is due mainly to continuing weakness in Plus-3 economies, especially China where growth has turned out to be much weaker. Growth in the ASEAN region, buoyed by strong domestic demand, is revised upwards to 5.6 percent. This year, growth in the ASEAN+3 region is projected to strengthen to 4.3 percent, as China’s economy is expected to rebound strongly reflecting the removal of containment measures and reopening of its economy. Inflation is anticipated to come down to 4.5 percent in 2023 from the projected 6.3 percent spike last year.
The weakening global environment has taken the wind out of the sails of the region’s external trade momentum. The drag on economic activity from aggressive monetary policy tightening in the United States and euro area will be felt more fully this year, translating to softer export orders for the ASEAN+3.
However, the ongoing resumption of tourism — especially with the return of Chinese tourists—will provide a much-needed boost to growth.
“With recession risks still haunting the United States and Europe, China’s economic reopening cannot come at a better time for the region,” said AMRO Chief Economist, Hoe Ee Khor. “China’s stronger economy will provide support for regional activity while the border reopening will boost intraregional tourism.”
Inflation is moderating across ASEAN+3, tempered by sustained policy tightening by central banks and easing global supply chain bottlenecks. Oil prices have reverted to almost pre-pandemic levels reflecting weaker global demand. Prices of key agricultural commodities — although remaining relatively high due to the prolonged war in Ukraine—have fallen from their peaks in 2022.
AMRO’s assessments are found in the latest quarterly update of its flagship report, the ASEAN+3 Regional Economic Outlook (AREO). The AREO 2023 will be published in April.
The ASEAN+3 Macroeconomic Research Office (AMRO) is an international organization established to contribute towards securing macroeconomic and financial stability of the ASEAN+3 region, comprising 10 members of the Association of Southeast Asian Nations (ASEAN) and China; Hong Kong, China; Japan; and Korea. AMRO’s mandate is to conduct macroeconomic surveillance, support the implementation of the regional financial arrangement, the Chiang Mai Initiative Multilateralisation (CMIM), and provide technical assistance to the members.