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Fears of a recession in the U.S. have faded, with the country’s economic strength providing a strong tailwind to many Asian countries’ exports, especially those of electronic goods. Weaker Asian currencies in H1 2024 also provided an additional boost to export demand.
With the employment outlook also remaining positive as office-based employment continues to grow, CBRE has upgraded its 2024 Asia Pacific GDP growth forecast to 3.9%.
Sluggish growth in mainland China remains the key risk facing the region, with the market's imbalanced economic structure and subdued household confidence of particular concern.
Mid-year review
The U.S. economy is poised for a soft landing in 2024, with inflation falling and the labour market softening. Asia Pacific GDP growth is expected to slow to 3.5% in 2024 from last year’s 4.3%. While the economy in mainland China is normalising, the coming months will see the launch of additional supportive measures to buoy economic growth.
Forecast made in January 2024
Soft landing for U.S; Mainland China’s growth normalises
Fears of a recession in the U.S. have faded, with the country’s economic strength providing a strong tailwind to many Asian countries’ exports, especially those of electronic goods. Weaker Asian currencies in H1 2024 also provided an additional boost to export demand.
With the employment outlook also remaining positive as office-based employment continues to grow, CBRE has upgraded its 2024 Asia Pacific GDP growth forecast to 3.9%.
Sluggish growth in mainland China remains the key risk facing the region, with the market's imbalanced economic structure and subdued household confidence of particular concern.
Mid-year review
The U.S. economy is poised for a soft landing in 2024, with inflation falling and the labour market softening. Asia Pacific GDP growth is expected to slow to 3.5% in 2024 from last year’s 4.3%. While the economy in mainland China is normalising, the coming months will see the launch of additional supportive measures to buoy economic growth.
Forecast made in January 2024
Soft landing for U.S; Mainland China’s growth normalises
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The Fed’s forecast in June suggested only one 25bps rate cut this year, a revision from the three cuts expected in its March forecast. Based on the latest economic data, CBRE expects the Fed to start cutting rates in September. Despite a brief rebound in Q1 2024, swap rates for Asia Pacific (ex. Japan) have eased from the peaks seen last year.
Policy rates across Asia Pacific (ex. mainland China) will end higher than CBRE’s January forecast and are unlikely to return to pre-pandemic levels in the short term. The market has priced in no rate cuts for Australia this year, while most other markets including Korea, India and New Zealand are expected to implement their first cuts in Q4 2024. Japan has kept policy rates stable after a hike in March, with any further policy shift in H2 2024 expected to be mild.
Mid-year review
Interest rate cuts in Asia Pacific will begin in mid-2024. The downward interest rate cycle will come on the back of easing CPI-inflation in most markets as well as widely anticipated U.S. interest rate cuts, which are set to begin from May. Exceptions include Japan, where the Bank of Japan (BoJ) may raise its policy rate, although any increases are likely to be marginal and should not have much impact on investors' borrowing costs; and mainland China, which is expected to maintain a loose monetary policy.
Forecast made in January 2024
Asia Pacific set to enter rate cut cycle by mid-2024
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The Fed’s forecast in June suggested only one 25bps rate cut this year, a revision from the three cuts expected in its March forecast. Based on the latest economic data, CBRE expects the Fed to start cutting rates in September. Despite a brief rebound in Q1 2024, swap rates for Asia Pacific (ex. Japan) have eased from the peaks seen last year.
Policy rates across Asia Pacific (ex. mainland China) will end higher than CBRE’s January forecast and are unlikely to return to pre-pandemic levels in the short term. The market has priced in no rate cuts for Australia this year, while most other markets including Korea, India and New Zealand are expected to implement their first cuts in Q4 2024. Japan has kept policy rates stable after a hike in March, with any further policy shift in H2 2024 expected to be mild.
Mid-year review
Interest rate cuts in Asia Pacific will begin in mid-2024. The downward interest rate cycle will come on the back of easing CPI-inflation in most markets as well as widely anticipated U.S. interest rate cuts, which are set to begin from May. Exceptions include Japan, where the Bank of Japan (BoJ) may raise its policy rate, although any increases are likely to be marginal and should not have much impact on investors' borrowing costs; and mainland China, which is expected to maintain a loose monetary policy.
Forecast made in January 2024
Asia Pacific set to enter rate cut cycle by mid-2024
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The political landscape in Asia Pacific has remained on a stable footing, with most major elections having been completed without incident in H1 2024. Little, if any, impact on investment sentiment has been observed, with investors far more concerned about the trajectory of interest rates.
The new Taiwanese administration has signalled its intention to maintain the cross-strait status quo. In India, Prime Minister Modi's retention of key cabinet positions despite his party's loss of its majority in the general election will ensure his reform agenda remains intact.
Investors are paying close attention to November’s U.S. presidential election as potential tax cuts and tariff increases could reshape the interest rate outlook globally.
Mid-year review
Several key elections are scheduled for 2024, with all eyes on the U.S. presidential election in November. In Asia Pacific, voters in Korea, India, Indonesia and Taiwan have already or are due to go to the polls this year. Cross-strait and Sino-U.S. relations will come under closer scrutiny over the next 12 months. Should these elections pass without incident and result in the creation of a more stable political environment, corporate and investor sentiment will improve.
Forecast made in January 2024
Geopolitical tension mounts in election year
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The political landscape in Asia Pacific has remained on a stable footing, with most major elections having been completed without incident in H1 2024. Little, if any, impact on investment sentiment has been observed, with investors far more concerned about the trajectory of interest rates.
The new Taiwanese administration has signalled its intention to maintain the cross-strait status quo. In India, Prime Minister Modi's retention of key cabinet positions despite his party's loss of its majority in the general election will ensure his reform agenda remains intact.
Investors are paying close attention to November’s U.S. presidential election as potential tax cuts and tariff increases could reshape the interest rate outlook globally.
Mid-year review
Several key elections are scheduled for 2024, with all eyes on the U.S. presidential election in November. In Asia Pacific, voters in Korea, India, Indonesia and Taiwan have already or are due to go to the polls this year. Cross-strait and Sino-U.S. relations will come under closer scrutiny over the next 12 months. Should these elections pass without incident and result in the creation of a more stable political environment, corporate and investor sentiment will improve.
Forecast made in January 2024
Geopolitical tension mounts in election year
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