S&P unit sees strong Q4 growth in Asia Pacific

MANILA, Philippines — S&P Global Market Intelligence sees a sustained economic growth for Asia Pacific in the fourth quarter of the year and next year despite weak demand for exports.

Rajiv Biswas, chief economist for Asia Pacific at S&P Global Market Intelligence, said “the Asia-Pacific economic outlook for the fourth quarter of 2023 and calendar 2024 is for sustained economic expansion” despite challenges faced by many economies in the region in terms of their merchandise exports performance.

“Although merchandise exports in many APAC industrial economies have faced significant headwinds in 2023 from weak global demand, this has been mitigated by the continuing recovery of international tourism across the APAC region,” Biswas said.

In the Philippines, merchandise export earnings reached $47.81 billion in the January to August period, down 6.6 percent from $51.18 billion in the same period last year, according to the Philippine Statistics Authority.

While the country’s merchandise exports value declined year-on-year in the eight-month period, merchandise exports rose by 4.2 percent to $6.7 billion in August from the previous year’s $6.43 billion.

The Philippine economy grew at a slower pace of 4.3 percent in the second quarter from the previous quarter’s 6.4 percent, as high inflation and interest rates dampened consumption.

With first semester growth at 5.3 percent, the Philippine economy would need to grow by at least 6.6 percent in the second half to achieve the low-end of the government’s full-year 2023 target of six to seven percent.

Aside from recovery in tourism in the region, Biswas said China’s third quarter gross domestic product (GDP) data is showing signs the economy is stabilizing as growth improved significantly on a quarter-on-quarter basis.

He also cited India’s strong economic performance, with industrial production showing rapid year-on-year growth in August.

As for the outlook on the global economy, S&P Global Market Intelligence said its real GDP growth forecast for this year remains unchanged at 2.6 percent.

It expects global real GDP growth, however, to slow to 2.3 percent next year, with the risk of a protracted period of weakness rising.

“The Israel-Hamas conflict adds to already elevated economic uncertainty. A major escalation in the con?ict would make a material difference to economic prospects and our forecasts,” S&P Global Market Intelligence warned.

It said the impact of the conflict is being seen in various channels including higher energy prices.

“The moderation in global consumer price in?ation is temporarily stalling given energy-related pressures,” S&P Global Market Intelligence said.

It also said financial conditions are likely to be tighter for longer.

“Persistent concerns over underlying price pressures suggest rate cuts in advanced economies still remain some way off,” it said.