AMRO Revises Up ASEAN+Korea, China, Japan Economic Growth to 4.6% This Year by 0.3%P

2023 Regional Economic Outlook Report
'ASEAN+3' 4.3→4.6%... 'China' 5.0→5.5%

The ASEAN+3 Macroeconomic Research Office (AMRO) has revised upward the economic growth forecast for South Korea, China, Japan, and the 10 ASEAN countries to 4.6%. This reflects expectations of a sharper recovery in the services sector, including tourism, compared to the forecast made in January this year. This contrasts with the earlier decision to lower South Korea's growth forecast by 0.2 percentage points.

The Ministry of Economy and Finance announced on the 6th that AMRO released the "2023 Regional Economic Outlook (AREO)" report containing these details.

AMRO is an international organization established in Singapore in 2011 that analyzes and monitors economic trends in ASEAN+China, Japan, and South Korea, and supports economic and financial stability among member countries. Every year, AMRO reviews the overall economic trends of the three countries and the 10 ASEAN nations and publishes a regional economic outlook report with policy recommendations.

AMRO forecasts that the ASEAN+3 region will grow by 4.6% in 2023, driven by a recovery in the services sector such as tourism. This is 0.3 percentage points higher than the previous forecast of 4.3% made in January. The economies of China, Japan, and South Korea are expected to grow by 4.5% this year.

Economic growth in ASEAN+3 is expected to be led by China. AMRO revised China's growth rate upward from 5.0% to 5.5%. Japan's growth forecast remains unchanged at 1.2%. Regarding South Korea, in the annual consultation report released on the 4th, the growth forecast was lowered from 1.9% to 1.7% due to a decline in exports caused by weakened external demand.

The economic growth rate for ASEAN+3 in 2024 is projected to slow slightly to 4.5%. China's growth is expected to slow to 5.2%, and Japan's to 1.1%, while South Korea's growth rate is expected to increase to 2.3%.

Due to declines in international commodity and food prices, inflation is expected to ease somewhat in most ASEAN+3 countries, with the inflation rate forecast to drop from 6.5% in 2022 to 4.7% this year. However, this is 0.2 percentage points higher than the January forecast of 4.5%. Inflation is expected to rise by 2.0% in China, 1.5% in Japan, and 3.3% in South Korea this year.

AMRO identified short-term downside risks to the economy including a rebound in international energy prices, a sharp slowdown in the U.S. economy, and delays in China's economic recovery. Medium-term risks include deepening fragmentation of the global economy due to expanded U.S.-China conflicts, and long-term risks include climate change and other factors affecting the regional economy.

AMRO also noted that while most countries in the region are pursuing tight fiscal policies, selective support for vulnerable groups and sectors remains necessary. It emphasized the need to enhance fiscal soundness through efficient resource allocation and fiscal reforms, but also urged readiness to shift policy stances if downside risks materialize. Regarding monetary policy, AMRO recommended appropriate adjustments based on each country's inflation and growth trajectory.

(Photo) [Image source=Yonhap News]

This content was produced with the assistance of AI translation services.