• Global Research
    • General Research Insights
    • Emerging markets
    • Macro and rates outlook

ASEAN Perspectives

  • Article
  • Half of ASEAN’s economies look set to cut policy rates in the second quarter this year, but rising rice prices may complicate matters
  • ASEAN’s growing regional economic integration is a source of resilience and growth as some export markets slow
  • We flag key economic policies for each economy in the region, along with implications that investors should watch for

2024 outlook: Rate cuts, regional integration, and policy

ASEAN and the Fed

ASEAN, in general, did not face the same high levels of inflation compared to the developed world in 2023. And yet, in many instances, ASEAN central banks still tightened monetary policy to keep capital at home and to support their currencies. However, come 2Q 2024, we expect the Federal Reserve (Fed) to begin its long-awaited easing cycle. ASEAN economies can then finally catch their breath as we expect central banks that have tightened the most to lead the pack and loosen monetary policy in the same quarter as the Fed.

Complicating rate cut decisions and a staple of the region is rice. Global rice prices are at their highest levels since the food crisis years of 2007-2008. This will likely put a floor under how much inflation can moderate in ASEAN, or worse, push it up. The risk appears more for the net importers of the grain, such as the Philippines and Indonesia, and less so for surplus economies, such as Thailand and Vietnam.


We are optimistic – if not bullish – about ASEAN’s growth prospects. However, this does not mean that ASEAN is immune to the vagaries of the global economy. In the Year of the Dragon, we expect growth in ASEAN to improve but not to be at full throttle. We do not see ASEAN receiving the same lift it used to get from mainland China, while a surge in trade between ASEAN and the US appears highly unlikely. Investment in the region should also slow as the rate hikes over the past two years impact the real economy.

Nonetheless, we think ASEAN in 2024 will draw strength from within. Mainly thanks to a strong labour market, consumption in the region has held up so far and will likely improve as monetary policy eases. This should also help sustain trade since, lest we forget, ASEAN economies export to each other, with final demand for exports from neighbours almost on par with final demand from mainland China and the US. Though there may be less firepower coming from the rest of the world, ASEAN end-demand is a force in itself.

Key economic policies

Malaysia is looking into making its subsidies more targeted in the hopes of creating fiscal space without stoking inflation. Singapore and Vietnam are looking into implementing a global minimum 15% corporate income tax rate, while uncertainty looms over whether Thailand’s planned big fiscal stimulus package will see the light of day. Market participants in the Philippines are watching the economy’s food policies very carefully.

Would you like know more? Click here* to read the full report. You must be a subscriber to Global Research to access this link.

To find out more about HSBC Global Research, and how to subscribe, please email askresearch@hsbc.com.

Global Research

HSBC Global Research provides information, insights and thought-provoking ideas.

Find out more

For more information on gaining access to Global Research, ASK Research using the button below.