Weaker consumption seen to drag down growth in 2024

For Manila, other Aspac cities

MANILA, Philippines — Several major cities in Asia and the Pacific, including Manila, are likely to post a slower growth next year compared to this year as consumption weakens, according to think tank Oxford Economics.

In its City Economic Prospects Quarterly report, Oxford Economics said gross domestic product (GDP) growth may slow in many major cities in the region next year.

“In APAC, we expect most major cities will see growth slow in 2024 compared to 2023, with weaker private consumption growth being a key theme,” it said.

Cities in the region expected to register slower growth next year include Shenzhen, Beijing, Shanghai, Manila, Bangkok, Taipei, Hong Kong, Tokyo, Sydney, Seoul and Melbourne.

Meanwhile, Oxford Economics expects growth in Indian cities to remain strong next year, with Hyderabad and Bengaluru GDP projected to rise by 9.3 percent and 8.9 percent, respectively in 2024, faster than the 3.3 percent average for Asia-Pacific’s 33 major cities.

Indian cities are likely to benefit from rising real incomes, which will support growth in consumer services as well as growth in a range of professional services including information and communications technology, where these cities have become globally competitive.

With global growth projected to ease next year amid high interest rates, Oxford Economics said it was inevitable that the world’s major cities would also grow at a slower pace in 2024 than this year.

“Following a year of subdued global growth in 2023, we think a further softening of economic conditions is likely next year,” Oxford Economics said.

The think tank is forecasting global GDP to grow by 1.9 percent next year compared to an expected expansion of 2.5 percent this year.

It said this would represent the weakest annual growth figure since the global financial crisis, excluding the 2020 result induced by the COVID pandemic.

“The main drivers underpinning this slowdown are weaker outlooks for the US and China,” Oxford Economics said.

It said the US growth momentum was likely to slow sharply as tight monetary and fiscal policies as well as depleted savings weigh on the economy.

As for China, boosts from economic reopening post-pandemic are now fading, while the adverse headwinds caused by the property market downturn are growing, according to the think tank.

While major cities are expected to see slower growth next year, it said these are likely to grow faster than their respective national economies, citing favorable structural factors such as advantageous mix of industries, highly skilled workforce and strong global connectivity.