This uptick is attributed to robust domestic demand driven by higher household incomes and a resurgence in investment activity. Additionally, a rebound in exports, spurred by a global chip upcycle, along with the continued recovery of the tourism sector, are expected to provide further economic momentum.
Despite this positive outlook, AMRO cautioned against complacency, highlighting potential risks such as global commodity price spikes, China's economic performance, and geopolitical tensions. With inflation forecasted to decrease from 2.8% to 2.5% in 2024, and down to 2.3% in 2025, the agency advised the region’s leaders to rebuild policy space to sustain growth.
The report also emphasized the importance of boosting investment and embracing technology to enhance productivity and resilience, particularly among smaller firms, and underscores the necessity of regional collaboration in addressing aging populations, trade reconfigurations, and technological advancements.
