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Published: March 04, 2024 | Updated: May 17, 2024
Read time: 3 minutes
In 2024, consumers and businesses around the globe will make difficult decisions about how to spend and invest, according to the Mastercard Economic Institute’s Economic Outlook 2024 report.
Resources will be carefully prioritized as interest rates, wages and prices remain high relative to pre-pandemic levels. However, moderating inflation, steady read economic growth and varied regional dynamics will sustain consumer empowerment.
Here’s how the dynamics are playing out in Asia Pacific.
Key takeaways for Asia Pacific in 2024:
Headwinds & tailwinds to watch
2024 headwinds:
- Household budgets in Asia Pacific are likely to be dependent on central bank policies and how long mortgage costs stay high for, or how much it has risen.
- Income disparities between affluent and mass market consumers tend to be wider in emerging than developed economies with lower income. Household budgets allocated to discretionary goods may be slower to recover in emerging markets as inflation-adjusted incomes recover this year given the sharp rise in essentials the past couple of years.
- Mass market consumers spend a higher share of their wallet relative to affluent consumers on essentials. Any unforeseen shocks to prices of essentials may drive another round of cutbacks in discretionary purchases.
2024 tailwinds:
- Monetary policy could see some easing, with rate cuts likely across the Asia Pacific region in tandem with the US federal reserve’s interest rate path.
- Economies in ASEAN and Oceania will enter their third year without pandemic restrictions in 2024.
- The progressive fulfilment of out-and-about demand should support a rotation of spend back into goods, positively impacting Asian manufacturers. This is a similar trend globally as well and should result in a convergence in performance of between manufacturing and services.
- Northeast Asian economies may continue to see out-and-about services outperform for a good part of 2024 as the travel recovery enters its second year.
Country breakdown
Read the full Economic outlook 2024 report and learn more about the Mastercard Economics Institute.
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