ASEAN
TikTok Shop’s gross merchandise volume rises to US$16.3 billion in 2023
(16 July 2024) TikTok has significantly increased its presence in Southeast Asia’s e-commerce market. TikTok Shop’s gross merchandise volume (GMV) rose nearly fourfold from US$4.4 billion in 2022 to US$16.3 billion in 2023, making it the fastest-growing e-commerce platform in the region. The platform, combined with Tokopedia, now holds a 28.4% market share, surpassing Lazada and becoming the second-largest player in the ASEAN region. The total e-commerce GMV in the region reached US$114.6 billion in 2023. Shopee remains the market leader with a 48% share. TikTok has invested heavily in Southeast Asia, expanding its workforce to over 8,000 by 2023 and leveraging its livestreaming feature to drive sales. In Indonesia, despite a temporary ban on social media transactions, TikTok took a 75% stake in Tokopedia, achieving a 39% market share. In Vietnam, TikTok Shop holds a 24% market share.

MALAYSIA
Malaysia to decide high-speed railway project with Singapore by year-end
(18 July 2024) Malaysia is evaluating proposals for a high-speed rail link between Kuala Lumpur and Singapore, with a decision expected by the end of Q4. The government has shortlisted three out of seven consortiums: YTL Corp., Berjaya Land Bhd, and China Railway Construction Corporation. The project, initially approved in 2013 and later scrapped, is estimated to cost up to MYR 100 billion (US$21.4 billion) but could be lower based on the proposals. The rail line aims to reduce travel time to 90 minutes. Malaysia’s Transport Minister noted the government is reluctant to guarantee the project to avoid increasing debt but is open to incentivising the private sector. Additionally, Malaysia plans to complete its China-built east-west coast rail line by the end of 2026 and is discussing linking this network with Thailand’s rail system, aiming for broader Southeast Asia-China connectivity.

INDONESIA
Japanese automakers pushes hybrids amidst rising competition from Chinese EV brands
(17 July 2024) Japanese automakers Toyota and Nissan are highlighting their latest hybrid electric vehicles at the Gaikindo Indonesia International Auto Show, amid rising competition from Chinese EV brands. Toyota introduced new Prius hybrids, priced at around IDR 698 million (US$43,255), while Nissan unveiled the hybrid e-Power Serena for IDR 640 million. Japanese automakers currently dominate over 90% of Indonesia’s market, with Toyota holding more than 50% of sales in early 2024. However, Chinese brands like BYD are making inroads, showcasing models priced between IDR 365 million and IDR 465 million. The Indonesian government is pushing for a shift to EVs to achieve net-zero emissions by 2060, leveraging its nickel reserves. Despite this, limited charging infrastructure and high EV prices deter consumers, making hybrids a popular choice.

INDONESIA, THE PHILIPPINES
Filipino bonds widen lead over Indonesian bonds as rate cuts loom
(18 July 2024) The prospect of an interest-rate cut in the Philippines is boosting the nation’s bonds, outperforming Indonesia’s. The yield on the benchmark 10-year Philippine bond has declined since May 2024, while Indonesia’s has remained high, widening the gap to the most since September 2022. Bangko Sentral ng Pilipinas (BSP) may cut rates as early as August, driven by inflation falling below 4%. In contrast, concerns about Indonesia’s fiscal deficit and currency are affecting bond performance, despite yields above 6%. Indonesian debt is weighed down by potential increased spending and possible removal of a deficit ceiling under President-elect Prabowo Subianto. Philippine bonds are expected to yield 2.5% in July, leading Asia, compared to Indonesia’s 1.7%. Bank Indonesia kept its key rate unchanged on 17 July, with possible rate cuts later in 2024. Analysts expect the yield spread between the Philippines and Indonesian bonds to persist through year-end.

SINGAPORE
Full-year growth projected to be close to potential rate of 2% to 3%
(19 July 2024) Singapore’s full-year economic growth is projected to be close to its potential rate of 2% to 3%, with core inflation expected to ease significantly in Q4, according to the Monetary Authority of Singapore (MAS). The GDP growth forecast is in the upper half of the Trade Ministry’s 1% to 3% range, up from 1.1% in 2023. The MAS reported a net profit of S$3.8 billion (US$2.8 billion) for the 2023/24 financial year. Assets under management in Singapore grew by 10% to S$5.41 trillion in 2023, with significant growth in private markets. The wealth management industry has expanded alongside asset management, despite a recent money laundering case. The MAS will invest an extra S$100 million to support financial institutions in developing quantum and artificial intelligence technologies.

THAILAND
Thailand expands visa-free entry scheme to 93 countries and territories
(17 July 2024) Thailand has expanded its visa-free entry scheme to 93 countries and territories to revitalise its tourism industry, allowing visitors to stay for up to 60 days. Previously, only passport holders from 57 countries could enter without a visa. In the first half of 2024, Thailand recorded 17.5 million foreign tourist arrivals, a 35% increase from the same period in 2023 but still below pre-COVID-19 levels. Most visitors were from China, Malaysia, and India. Tourism revenue for this period was THB 858 billion (US$23.6 billion), less than a quarter of the government’s target. The new visa-free rules are part of a broader plan to boost tourism, which includes a five-year visa for remote workers and a one-year post-graduation visa for students with a bachelor’s degree or higher. Authorities also extended a waiver on hoteliers’ operating fees for two years and scrapped a proposed tourism fee. Concerns have been raised about infrastructure capacity and safety, with issues such as air traffic bottlenecks and rumours of tourists being kidnapped to work in scam centres.

VIET NAM
Viet Nam’s economy expanded to expand by 6.3% in 2024 and 6.5% in 2025
(17 July 2024) The Asean+3 Macroeconomic Research Office has forecasted Viet Nam’s economy to grow by 6.3% in 2024 and 6.5% in 2025, with the 2024 growth rate revised up by 0.3 percentage points from April’s forecast. This is the highest projected growth rate among Asean countries for 2024. Chief economist Hoe Ee Khor highlighted that Viet Nam, previously affected by a downturn in external demand, is expected to benefit from a turnaround in 2024. The Asian Development Bank also revised its growth projection for Viet Nam to 6.2%, up from 6% in April. The Ministry of Planning and Investment anticipates even higher growth, forecasting a 7% expansion for the full year, with 7.4% and 7.6% growth in the last two quarters of 2024, respectively. The General Statistics Office reported a 6.93% growth rate for the second quarter and 6.42% for the first six months of 2024.

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AUSTRALIA
Unemployment rate rises to 4.1% in June 2024 from 4% in May
(18 July 2024) Australia’s unemployment rate rose to 4.1% in June 2024, up from 4% in May, as reported by the Australian Bureau of Statistics. The economy added over 50,000 jobs, surpassing the 20,000 forecasted by economists, with full-time positions increasing by 43,300 and part-time positions by 6,800. The participation rate edged up to 66.9%, close to the record 67% set in November 2023. Despite the rise in unemployment, the labour market remains strong, with the federal treasurer noting 930,000 jobs added since May 2022. The Reserve Bank of Australia (RBA) will consider these labour figures along with June quarter inflation data in its August meeting. The likelihood of a 25-basis-point rate hike to 4.6% was assessed at 15% prior to the jobs report. Unemployment increased by 10,000 to 608,000 in June, still 100,000 fewer than pre-Covid-19 levels. A separate NAB survey indicated easing business conditions due to slow economic growth and soft consumer demand.

NEW ZEALAND
Annual inflation rate decreases to 3.3% in Q2 2024 from 4% in Q1
(17 July 2024) New Zealand’s annual inflation rate decreased to 3.3% in Q2 2024 from 4% in Q1. This figure was lower than economists’ expectations of 3.4% and the Reserve Bank of New Zealand’s (RBNZ) forecast of 3.6%. Consumer prices increased by 0.4% from the previous quarter, below the 0.5% estimate. The RBNZ maintained the official cash rate at 5.5% and acknowledged signs of a deepening economic downturn. The central bank expressed confidence that inflation will return to its 1%-3% target range in 2024, leading to speculation about potential interest-rate cuts. Non-tradables inflation, indicating domestic price pressures, slowed to 5.4% from 5.8%, while tradables prices, reflecting global commodities and imports, rose 0.3% year-on-year, down from 1.6%. Housing and household utilities were the largest contributors to annual inflation.

JAPAN
Japan’s exports in June 2024 increase for seventh consecutive month
(18 July 2024) In June, Japan’s exports increased for the seventh consecutive month, reaching JPY 9.2 trillion (US$59.1 billion), a 5.4% rise from a year earlier, driven by semiconductor equipment. Imports also grew for the third month in a row, reaching JPY 8.9 trillion, up 3.2%. The trade balance for the first half of the year showed a deficit of JPY 3.2 trillion, nearly half of last year’s figure. Semiconductor manufacturing equipment exports surged by 37.9%, while nonferrous metals rose 22%. Imports of computers and related products increased by 48.5%, and motors by 37.6%. Exports to the U.S. rose by 11% to JPY 1.9 trillion, and exports to China grew by 7.2%. Overall exports to Asia increased by 7.7%, but exports to the EU declined by 13.4%. Despite the rise in export value, total export volume fell by 6.2%, indicating higher prices rather than increased demand. Import volume dropped by 8.9%. A testing scandal involving major automakers affected exports, but recovery is expected once the issue is resolved. In yen terms, June export prices rose by 10.4%, while import prices increased by 9.5% due to a weaker yen and higher prices for crude oil and metals.

ASEAN
Southeast Asia’s IPO market sees 71% decline in market capitalization in first half of 2024
(08 July 2024) In the first half of 2024, Southeast Asia’s IPO market saw a significant decline, with market capitalization dropping 71% to US$5.8 billion. The region recorded 67 IPOs, down 21.2% from the previous year, raising US$1.38 billion, a 59.4% decrease. Only one large IPO exceeded US$1 billion in market capitalization and raised over US$200 million, compared to three large IPOs the previous year. This decline continues a downward trend that began in late 2022, influenced by geopolitical instability and high interest rates. Indonesia experienced the steepest drop, with market capitalization of listings falling 92.2% to US$1.22 billion and the IPO proceeds raised down 89.1% to US$248 million. Despite this, there is cautious optimism for improvement post-2024, with potential for AI-related IPOs and a return of REIT listings as interest rates decrease.

MALAYSIA, VIET NAM
Viet Nam and Malaysia reaffirm commitment to enhancing bilateral trade relations
(10 July 2024) On 09 July, 2024 Viet Nam’s Minister of Industry and Trade and Malaysia’s Minister of Investment, Trade and Industry reaffirmed their commitment to enhancing bilateral trade relations. The ministers co-chaired the fourth meeting of the Vietnam-Malaysia Joint Trade Committee in Hanoi. Viet Nam emphasised Malaysia’s importance as a trade and investment partner, noting increasing Malaysian investments in Vietnam. Malaysia expressed high expectations for cooperation with Vietnam. A joint statement was signed to solidify these commitments. A technical meeting held on 08 June, 2024 highlighted satisfaction with progress in economic, scientific, and technical cooperation since their last meeting in 2015. Both sides committed to implementing agreements from Malaysian Prime Minister Anwar Ibrahim’s visit in July 2023, focusing on promoting trade and investment. They also agreed to work towards a bilateral trade turnover target of US$18 billion, facilitating market access for products, including halal goods, in both countries.

MALAYSIA, SINGAPORE
Malaysia and Singapore near agreement to establish ASEAN’s first cross-border SEZ
(10 July 2024) Malaysia and Singapore are nearing an agreement to establish Southeast Asia’s first cross-border special economic zone (SEZ), expected to be unveiled in September 2024. Malaysia’s Economy Minister Rafizi Ramli and Johor state Chief Minister Onn Hafiz Ghazi indicated that the geographic makeup of the zone is almost finalised. The SEZ aims to facilitate the free movement of goods and people between Johor and Singapore. Malaysia has completed its proposals and is awaiting feedback from Singapore. The SEZ will encompass 3,505 square kilometres and include 16 sectors such as electronics, manufacturing, and healthcare. Malaysia plans to offer fiscal incentives for companies within the SEZ, to be detailed in an upcoming budget speech. The SEZ is expected to benefit from a proposed high-speed rail project between Kuala Lumpur and Singapore, with Malaysia considering several private proposals for the rail project.

INDONESIA
Incoming President Prabowo Subianto to allow national debt to increase to 50% of GDP
(11 July 2024) Indonesia’s incoming president, Prabowo Subianto, will allow the national debt to increase to 50% of GDP to fund his spending programmes, contingent on boosting tax revenue. The debt-to-GDP ratio, currently at 39%, could rise to 50% while maintaining an investment-grade rating, based on discussions with the World Bank. The administration plans to increase revenues through taxes, excise taxes, royalties, and import duties. Key spending includes a US$28 billion free lunch programme for school children and pregnant mothers, projected to add 1.2% to GDP. Prabowo aims for 8% annual growth, supported by initiatives like building power plants, refineries, homes, and expanding food production. The government intends to gradually achieve the debt target, adding 2% annually over five years. Establishing a state revenue agency and considering subsidy cuts and state asset sales are part of the strategy to increase revenue. Rating agencies have warned that a significant rise in debt could weaken Indonesia’s sovereign credit profile.

THE PHILIPPINES
Tourism sector generates over US$4.83 billion in revenue in first half of 2024
(11 July 2024) The Philippines’ tourism sector generated over US$4.83 billion in revenue for the first half of 2024, marking a 32.81% increase from US$3.64 billion in the same period of 2023. The Tourism Secretary highlighted that this revenue growth will enhance livelihood opportunities for Filipinos, boosting the economy. As of 10 July, 2024 tourist arrivals totalled 3.17 million, with 2.9 million foreign nationals and 236,401 overseas Filipinos. South Korea led foreign arrivals with 824,000 visitors, followed by the United States with 522,000, and China with 199,000. The DOT expects both revenue and employment in tourism-related industries to continue rising in the second half of the year.

THE PHILIPPINES, VIET NAM
Viet Nam and the Philippines agree to establish rice industry alliance
(10 July 2024) Viet Nam and the Philippines have agreed to establish a rice industry alliance and upgrade their trade relationship to an investment partnership. The Vietnamese Minister of Agriculture noted that the Philippines is Viet Nam’s largest rice export market, accounting for 35-40% of total exports. In the first half of this year, Vietnam exported 4.68 million tonnes of rice worth US$2.98 billion, a 104% increase in volume and 32% in value from the same period in 2023. Viet Nam aims to improve rice quality, reduce costs, adapt to climate change, and ensure food security. The Philippines’ Secretary of Agriculture stated that the country imported 2.17 million tonnes of rice in the first half of the year, with 1.59 million tonnes from Viet Nam. The Philippines seeks to address agricultural challenges by importing Vietnamese machinery and technologies and aims to import fertilisers first.

MALAYSIA, THAILAND, LAO PDR, CHINA
New cargo rail service linking Malaysia, Thailand, Lao PDR, and China launches
(11 July 2024) A new cargo rail service, the ASEAN Express, has launched, connecting Malaysia, Thailand, Lao PDR, and China, aiming to open new markets and reduce costs for businesses and people in the region. The first train departed from Malaysia’s Kelana Jaya depot on 27 June, 2024 and arrived in Chongqing, China, on 11 July, carrying electronic appliances and agricultural products, with a transit time of under 14 days, compared to up to three weeks by sea. The service is expected to lower logistics costs by up to 30% and boost the rail manufacturing industry. The ASEAN Express links key inland ports, including Malaysia’s Kontena Nasional Inland Clearance Depot, Thailand’s Latkrabang Inland Port, and Lao PDR’s Thanaleng Dry Port. The rail service is 30% cheaper than road transport and is more sustainable. Experts see the service as a significant development for regional rail connectivity and anticipate lower logistics costs and increased efficiency.

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JAPAN
40-year government bond yields reach 3% for first time
(11 July 2024) Japan’s 40-year government bond yield reached 3% for the first time since its 2007 issuance. Caution from domestic life insurers and selling by overseas investors, ahead of the Bank of Japan’s (BOJ) 31 July, 2024 policy decision, contributed to the rise. The yield on the most recently issued 40-year bond remained below 3%, while three older bonds surpassed this level. Persistent yen weakening fuels speculation about BOJ’s potential policy normalization. Foreign investors sold Japanese medium- to long-term bonds for the fourth consecutive week, the longest streak in about a year, and offloaded the most 10-year JGB futures in late June. Traders anticipate BOJ may reduce bond buying and raise interest rates at the July policy meeting to support the yen, though this may not curb the yen’s decline and could further elevate bond yields.

CHINA
China’s exports grew 8.6% year-on-year in June 2024, fastest pace since March 2023
(12 July 2024) China’s exports grew 8.6% year-on-year in June, the fastest pace since March 2023. This exceeded the Reuters poll forecast of 8% growth. Imports, however, declined 2.3%, missing the forecasted 2.8% growth. Policymakers are relying on exports and manufacturing to drive growth amid weak domestic demand and a property sector slowdown. US and EU have increased tariffs on Chinese imports, including electric vehicles. Analysts suggest the export surge is due to manufacturers front-loading shipments ahead of US tariffs effective in August 2023. Disruptions in Red Sea shipping routes have also prompted early dispatches. June’s trade balance was US$99.05 billion, surpassing the US$85 billion forecast. For the first half of the year, exports rose 3.6% and imports 2%.

NEW ZEALAND
New Zealand’s house-building costs fall for first time in at least 12 years
(10 July 2024) New Zealand’s house-building costs fell for the first time in at least 12 years, driven by a 1.1% decline in the second quarter from the first. This marks the first recorded drop in the series since it began in 2012. Annual growth through June was 0.6%, the lowest on record. The Reserve Bank’s monetary tightening and weaker economic growth have reduced demand for new homes, leading to falling house prices and reduced consumer confidence. On 10 July, 2024 the Reserve Bank of New Zealand kept the Official Cash Rate at 5.5%, noting that high borrowing costs are curbing demand and inflation. CoreLogic Chief Property Economist Kelvin Davidson attributed the cost decline to reduced workloads in the construction sector and a slowdown in the growth of average hourly wage rates. Stable economic conditions and lower interest rates in 2025 are expected to revive house-building activity.

ASEAN
Minimum wage hikes across Southeast Asia causes concerns to industries
(02 July 2024) Southeast Asia’s manufacturing hubs are planning significant increases in their minimum wages starting in the second half of 2024. Minimum wages across Viet Nam rose by an average of 6% in July 2024, with workers in major cities like Hanoi and Ho Chi Minh City now guaranteed VND 4.96 million (US$193) per month. Concerns over wage inflation are prompting businesses to consider expanding beyond urban centres. Thailand plans a 14% increase in its daily minimum wage to THB 400 baht (US$10.9) from October 2024, a move met with industry opposition citing concerns about maintaining competitiveness. Meanwhile, the Philippines will raise Metro Manila’s daily minimum wage by 6% to PHP 645 (US$11), effective mid-July, aiming to mitigate consumer hardship amidst economic challenges. In contrast, Malaysia is maintaining its minimum wage at MYR 1,500 (US$318) per month for 2024, while introducing a new voluntary Progressive Wage Policy to stimulate wage growth through skill development and productivity incentives in specific sectors.

THE PHILIPPINES, SOUTH KOREA
Filipino fast food chain Jollibee Foods acquires 70% stake in South Korea’s Compose Coffee
(02 July 2024) Jollibee Foods (JFC) is acquiring a 70% stake in South Korea’s Compose Coffee for US$238 million to enhance its brand profile in Asia. Compose Coffee, with 2,612 stores, has the highest growth rate in South Korea’s coffee industry. JFC’s chairman, Tony Tan Caktiong, highlighted the strategic fit and growth potential of Compose Coffee. Local competitors Ediya Coffee and Mega Coffee each have over 3,000 outlets, while Starbucks operates 1,893 locations. Compose Coffee ranked sixth in consumer preference surveys. This acquisition follows JFC’s previous investments in Highlands Coffee, The Coffee Bean and Tea Leaf, and Common Man Coffee Roasters.

SINGAPORE, TAIWAN
Taiwanese companies seeking investors in Singapore amidst China tensions
(04 July 2024) Taiwanese companies are actively seeking investors in Singapore as tensions with China rise. In April, two Taiwanese business delegations visited Singapore, including a group led by the Taiwan Stock Exchange (TWSE), which features major companies like Hon Hai Technology Group and Acer. The TWSE partnered with the Singapore Exchange for the first time to host an investment pitch event, aiming to attract more Singaporean investors. The appeal of Singapore lies in its political stability and status as a regional headquarters hub. The Taiwan government recently heightened travel warnings for China following threats from Beijing. Taiwanese firms, like CyCraft and Bamboo Technologies, are prioritising Singapore for fundraising due to regulatory predictability and restrictions on Chinese investment. This trend reflects a broader strategy to engage neutral venues and secure capital amidst geopolitical challenges.

MALAYSIA, THAILAND
Malaysia and Thailand set bilateral trade target of US$30 billion by 2027
(04 July 2024) Malaysia and Thailand have set a bilateral trade target of US$30 billion (MYR 141.29 billion) by 2027 following the third Malaysia-Thailand Joint Trade Committee (JTC) meeting. The meeting, chaired by Malaysia’s investment, trade and industry minister and Thailand’s deputy prime minister and commerce minister, highlighted the economic ties between the countries. Trade between the two nations averaged US$24.73 billion (MYR 116.47 billion) annually from 2017-2023, peaking at US$27.74 billion (MYR 130.64 billion) in 2022 but dropping to US$24.83 billion (MYR 116.94 billion) in 2023 due to slower global trade. Key agreements included forming a trade and investment task force to enhance border trade and cross-border connectivity. Both countries will also facilitate agricultural trade and explore cooperation in rubber, land transport, connectivity, entrepreneurship, agriculture, and digital environments.

MALAYSIA, THE PHILIPPINES
The Philippines invites Malaysian companies to invest in southern Philippines
(02 July 2024) Philippine President Ferdinand Marcos Jr has invited Malaysian companies to invest in the southern Philippines, according to the Malaysian foreign ministry. During a meeting with Malaysia’s Foreign Minister Mohamad Hasan, Marcos highlighted positive developments in the region and encouraged Malaysian participation in economic activities to promote socio-economic growth. Mohamad Hasan’s visit, which coincided with the 60th anniversary of diplomatic relations between Malaysia and the Philippines, included discussions with his counterpart Enrique Manalo on enhancing bilateral cooperation in trade, investment, the halal industry, Islamic finance, and food security. The southern Philippines, affected by long-standing Muslim separatist insurgencies and extremist groups, remains a focus for development efforts following a 2014 peace pact with the Moro Islamic Liberation Front.

INDONESIA
Incoming president to fund nationwide school meal programme estimated at US$28 billion
(04 July 2024) Indonesia’s incoming president, Prabowo Subianto, plans to fund a nationwide school meal programme, estimated to cost IDR 460tn (US$28 billion), through stricter tax enforcement, reduced subsidies, potential borrowing, and budget cuts for the US$32bn new capital project, Nusantara. Discussions indicate an expansion of the cabinet from 34 to up to 43 portfolios and possibly creating new ministries or government agencies to manage the meal programme and boost tax collection. Prabowo’s administration faces challenges in increasing the tax revenue-to-GDP ratio from 10% to 16% and finding fiscal headroom without increasing the fiscal deficit. Prabowo may also prioritise spending plans over Nusantara, which faces financial and logistical issues. Although Indonesia’s debt-to-GDP ratio is relatively low at 39%, increased borrowing is considered a last resort due to potential impacts on investor confidence and public opinion. The school meal programme is expected to cost US$4.3bn in its first year and will be implemented in phases.

VIET NAM
Robusta coffee futures rise as traders monitor rainfall levels in Viet Nam
(04 July 2024) Robusta coffee futures have increased as traders monitor rainfall levels in Viet Nam, the leading producer of these beans, due to concerns over potentially reduced production. Weather forecaster Maxar predicts parts of Vietnam will receive enough rain to slightly improve soil moisture, although the amounts have been overestimated. Earlier this year, hot and dry weather in Vietnam damaged coffee trees, impacting the upcoming harvest. Rabobank analysts note the market’s focus on Vietnam’s wet season to determine if next year’s crop can recover from the April drought. Normal precipitation levels are expected in Vietnam for the coming week. However, coffee prices might decrease as hedge funds’ extreme net-long positions in futures could unwind with improved weather and historical breaking points being reached, according to Bloomberg Intelligence analysts led by Mike McGlone.

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JAPAN
Nikkei Stock Average reaches all-time closing high on 04 July, 2024
(04 July 2024) The Nikkei Stock Average reached an all-time closing high on 04 July, 2024, climbing 332.89 points (0.82%) to 40,913.65, surpassing its previous high of 40,888.43 from 22 March. The index peaked at 40,971.23 during trading but did not surpass the intraday high of 41,087.75 reached on 22 March. The Tokyo Stock Price Index (Topix) closed at 2,898.47, exceeding its previous high of 2,884.80 from 18 December, 1989. This surge mirrors gains in U.S. tech stocks driven by AI investment and expectations of the Federal Reserve lowering rates in September. Shuji Hosoi of Daiwa Securities attributed the rise to increased demand for AI chips and materials. Despite a weak yen, Hosoi anticipates a shift towards positive real wage growth and stronger domestic demand in the second half of the year. Masatoshi Kikuchi of Mizuho Securities noted that foreign investors are propelling Japan’s stock rally, overlooking the yen’s weakness.

CHINA
China’s GDP for Q2 of 2024 forecasted at 5.1% year-on-year
(04 July 2024) China’s GDP growth for Q2 of 2024 is forecasted at 5.1% year-on-year, following a 5.3% increase in Q1, according to a survey by Nikkei and Nikkei Quick News. Economists predict quarter-on-quarter growth to slow to 0.8% from 1.6%. Legal & General Investment Management describes the economic trajectory as “stable-to-downward” due to a stagnant property sector and lack of substantial government intervention. The average full-year GDP forecast is raised to 4.9%, with a range of 4.7% to 5.3%. Economists cite fiscal support and strong external demand as positive factors but note domestic demand remains weak. Trade tensions, particularly potential U.S. tariffs and EU tariffs on electric vehicles, pose risks. The yuan is expected to weaken to an average of 7.23 yuan per dollar by year-end. Long-term growth forecasts are 4.5% for 2025 and 4.3% for 2026, reflecting structural slowdowns and demographic challenges.

SOUTH KOREA
South Korean government announces US$18 billion support package for debt-laden small business owners
(04 July 2024) South Korea’s President Yoon Suk Yeol announced a US$18 billion support package for small business owners and the self-employed burdened by loans. This includes extended loan repayment periods up to five years and lower interest rates for up to 800,000 individuals, along with regulatory reforms to reduce fixed costs such as rent and utilities. The Finance Ministry upgraded its 2024 growth forecast to 2.6% from January’s 2.2%t. The government introduced a “Dynamic Economic Road Map” to address economic challenges, including improving shareholder returns and corporate governance, with tax incentives for increased dividends and reduced corporate tax rates. Key sectors identified for productivity innovation include artificial intelligence semiconductors, quantum technology, and biotechnology, with financial support worth 18.1 trillion won allocated for the semiconductor ecosystem.

MYANMAR
Thailand surpasses Singapore as primary financier of military equipment to Myanmar regime
(26 June 2024) A U.N.-sponsored investigation reveals that Thailand has surpassed Singapore as the primary financier and supplier of military equipment to Myanmar’s regime, the State Administration Council (SAC). This shift occurred after Singapore imposed restrictions on Myanmar-related accounts. The SAC’s weapon procurement through formal banking channels fell by one-third to US$253 million in 2023 due to heightened Western sanctions. Thailand’s arms transfers to Myanmar doubled to over US$120 million in 2023, with Siam Commercial Bank handling 80% of these transactions, increasing from US$5 million in 2022 to over US$100 million in 2023. The report, released as Thailand seeks a U.N. Human Rights Council seat, notes that Thai authorities did not publicly oppose arms transfers to Myanmar. In contrast, Singapore’s military exports to Myanmar dropped by 90% after similar scrutiny. The U.N. special rapporteur emphasised the importance of international financial pressure to curb Myanmar’s military activities, urging banks to sever ties with Myanmar’s state-owned banks. The investigation documented over US$630 million in arms-related transactions facilitated by banks in multiple countries, including Thailand, China, and Russia. Kasikornbank, another major Thai bank, ceased its dealings with Myanmar after U.S. sanctions.

MALAYSIA
Malaysia must address fuel subsidies first before introducing carbon tax
(25 June 2024) Malaysia is in discussions with the World Bank to develop a carbon tax scheme aimed at curbing emissions. Malaysia’s Natural Resources and Environmental Sustainability Minister stated that Malaysia needs to address its fuel subsidies before introducing a carbon tax. The country, an export-driven industrial economy, has been reliant on these subsidies. Malaysia aims for net-zero emissions by 2050 and has recently removed most diesel subsidies, with plans to target gasoline next. The finance ministry is spearheading efforts to establish a carbon tax, focusing on hard-to-abate sectors such as steel.

INDONESIA
Indonesia to digitize permits and licenses to attract high-quality international events
(27 June 2024) Indonesia is digitising permits and licences to attract high-quality international events, as announced by Indonesia’s Tourism and Creative Economy Minister. Bureaucratic hurdles have previously deterred events, including concerts by high-profile artists like Taylor Swift. Indonesia’s international tourist arrivals reached 11.7 million last year, with a 40-50% increase in spending per person. The World Bank forecasts steady GDP growth of 5.1% annually from 2024 to 2026. President-elect Prabowo Subianto aims for 8% GDP growth within two to three years. Uno emphasises the need for green transformation, digital infrastructure investment, and enhancing interconnectivity, particularly in Bali. He advocates for educating tourists on respectful behaviour and developing five ‘super priority’ destinations. Uno also highlights the importance of promoting Indonesia’s creative economy globally, including fashion and culinary arts.

THE PHILIPPINES
BSP leaves policy rates unchanged at 6.5%, accompanied by dovish commentary
(27 June 2024) The Bangko Sentral ng Pilipinas (BSP) has left policy rates unchanged at 6.5%, with unexpectedly dovish commentary. Despite the Philippine peso being the second weakest Asia-Pacific currency this quarter, BSP Governor Eli Remolona indicated a possible rate cut in August 2024, ahead of the anticipated US Federal Reserve cut. Inflation forecasts for 2024 and 2025 have been reduced to 3.1%, largely due to a cut in rice tariffs from 35% to 15%, effective 5 July. Rice tariffs, accounting for about half of Philippine headline inflation, are expected to alleviate inflation pressures. The market response was muted, with the peso weakening slightly but recovering quickly. BSP has been intervening to support the peso, aiming to prevent sharp depreciation. A rate cut in the fourth quarter is preferred, given the challenges of front-running the US Fed’s rate policy.

THAILAND
Government to court foreign buyers to address condominium supply glut
(26 June 2024) The Thai government is considering easing land leasing regulations to allow foreigners to buy up to 75% of condominium projects, up from the current 49%, and to lease land for 99 years, an increase from the previous 50 years. Prime Minister Srettha Thavisin announced these potential changes during a visit to Pattaya, aiming to address an oversupply of condominiums amid weak domestic purchasing power. The government believes these measures could stimulate the economy. Economists have mixed reactions, some seeing potential to reduce the condominium surplus, while critics argue it may primarily benefit large real estate companies. The Real Estate Information Centre reports an oversupply of about 440,000 condominium units, lower than during the 1997 Asian financial crisis.

SINGAPORE, EAST TIMOR
Singapore and East Timor to sign mutual visa waiver agreement
(27 June 2024) Singapore passport holders will soon be able to travel visa-free to Timor-Leste for up to 30 days, following a mutual visa waiver agreement signed on 27 June, 2024 between Singapore’s Foreign Minister Vivian Balakrishnan and Timor-Leste’s Foreign Minister Bendito dos Santos Freitas. Timor-Leste passport holders will continue to enjoy 30 days of visa-free travel to Singapore. This agreement supports Timor-Leste’s roadmap for ASEAN accession and strengthens bilateral relations. Timor-Leste has been an observer in ASEAN since 2023 and is preparing for full membership. Singapore’s Prime Minister Lawrence Wong and Dr Balakrishnan reaffirmed support for Timor-Leste’s ASEAN readiness. They also discussed enhancing cooperation in human resource development, trade, investment, energy, and education, with the Singapore embassy set to open in Dili in April 2024.

VIET NAM, AUSTRALIA
Viet Nam identified as fastest growing tourism market for Australia
(27 June 2024) Vietnamese tourist numbers to Australia have increased by over 50% compared to pre-COVID-19 levels, according to Australian Tourism and Trade Minister Don Farrell on 26 June, 2024. This growth presents opportunities for Australian businesses. To help them, the tourism research data provided now includes Viet Nam, which has been identified as Australia’s fastest-growing passenger market. The agency aims to strengthen ties with South-East Asia to attract more visitors. Australia’s top five international tourism markets are New Zealand, China, the US, the UK, and India. In 2023, 150,000 Vietnamese visited Australia, while 390,000 Australians travelled to Viet Nam, up from 383,000 in 2019. In the first five months of this year, Viet Nam saw a 35% year-on-year increase in Australian visitors, totalling 213,000, making Australia the seventh largest source of tourists to Viet Nam.

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AUSTRALIA
Inflation peaks upwards to 4.0% year-on-year in May 2024
(26 June 2024) Australia’s inflation, which had decreased to 3.4% year-on-year (YoY) in December 2023 from a peak of 8.4% in December 2022, has started to rise again. The latest inflation reading for May 2024 is 4.0% year-on-year, exceeding the expected 3.8% and up from 3.6% in April. The Reserve Bank of Australia (RBA) may consider a rate hike if the upcoming June inflation report does not show a decline. The May Consumer Price Index (CPI) data showed a slight decline of 0.04%, with significant drops in motor fuel prices. However, June could see an increase in CPI due to rising gasoline prices and seasonal changes. A 0.6% increase in June CPI would result in a 3.9% YoY inflation rate, but quarterly inflation would rise to 1.1% to 1.2% from 0.88% in Q1 2024.

NEW ZEALAND
New Zealand emerges from 18-month recession with 0.2% in Q1 2024
(20 June 2024) New Zealand’s economy grew by 0.2% in Q1 2024, after a 0.1% contraction in the previous quarter, marking its emergence from an 18-month recession. This growth was primarily driven by population growth due to record-high immigration. On a per capita basis, GDP fell by 0.3%, the sixth consecutive decline. Economists have highlighted that this growth masks underlying economic weakness. The Finance Minister noted the persistent impact of high inflation and borrowing costs on New Zealanders and emphasized the need for careful government spending and lower taxes. The Reserve Bank of New Zealand has raised interest rates to a 14-year high to combat inflation, affecting economic activity. Prime Minister Christopher Luxon’s centre-right coalition proposed a budget with NZD 14.7 billion (US$9 billion) in tax cuts over the next four years.

JAPAN
Spending by foreign visitors in Japan increases fivefold over the past decade
(26 June 2024) Spending by foreign visitors in Japan has increased fivefold over the past decade, becoming Japan’s second-largest export category. In Q1 2024, nonresident households spent an annualised JPY 7.2 trillion (US$45.1 billion) in Japan. This figure surpassed pre-pandemic levels of 4.6 trillion yen (US$28.59 billion) in Q4 2019 and continued to rise post-pandemic. While still less than half of the 17.3 trillion yen (US$108 billion) in auto exports in 2023, it exceeds exports of electronic components and steel. Visitor spending grew over 60% in the five years through Q1 2024, compared to 45% and 40% growth in auto and electronic component exports, respectively. Foreign tourist numbers have also surpassed pre-COVID-19 highs, with over 3 million monthly visitors since March 2023. Inbound spending rose 38.8% between Q4 2019 and Q4 2023, outperforming other major economies. The weak yen has boosted spending, with per-visitor spending up 31% from 2019 to 2023.

MYANMAR
Myanmar’s economy to expand by 1% for the year through March 2025
(12 June 2024) Myanmar’s economy faces a deepening crisis due to ongoing conflict and compulsory conscription, as reported by the World Bank. The GDP growth forecast has been reduced to 1% for the year through March 2025, down from 2% projected in December 2023. The slower growth is attributed to high inflation, labour shortages, foreign exchange constraints, and electricity issues. The country’s GDP also grew 1% in the past year. Conscription announced for February 2024 has led to increased migration and labour shortages. Trade disruptions have significantly affected imports and exports, with a 13% drop in exports and a 20% drop in imports over six months. Power outages are a growing problem, with 33% of companies citing them as their main issue. Inflation remains high, with consumer prices rising 30.4% last September. The poverty rate is expected to reach 32.1% for 2023-24, reflecting deteriorated economic conditions.

THAILAND
Thailand’s central bank maintains key interest rate at 2.5%
(12 June 2024) Thailand’s central bank maintained its key interest rate at 2.5%, as decided by a 6 to 1 vote in the latest monetary policy committee meeting. The decision aligns with the bank’s inflation target range of 1% to 3%, as the headline consumer price index rose by 1.54% in May. This marks the fourth consecutive meeting without a rate change. The bank’s forecast predicts 2.6% economic growth in 2024, driven by domestic demand, tourism recovery, and increased government spending, despite slow export growth. Economists anticipate potential rate cuts in the final quarter of the year, following the U.S. Federal Reserve’s expected rate adjustments. The central bank projects 3.0% economic growth and 1.3% inflation for 2025.

MALAYSIA
ASEAN must enhance rail connectivity to facilitate free flow of goods
(11 June 2024) Malaysia’s Transport Minister emphasised the need for ASEAN member states to enhance rail connectivity to facilitate the free flow of goods in the region. Loke highlighted the long-term vision of linking peninsular Malaysia’s railway network to Thailand, Laos, and China. He noted that despite existing connections, gaps remain in the Kunming-Singapore railway network. Addressing these gaps requires harmonised regulations and cross-border customs clearance. Malaysia is conducting a preliminary feasibility study on the Trans-Borneo Railway project, expected to be completed in nine months, to assess its commercial, technical, and logistical viability.

CHINA, ASEAN
Chinese solar panel producers cease some production in Southeast Asia due to after US tariff holiday expires
(07 June 2024) LONGi Green Energy Technology Co Ltd and Trina Solar Co, Ltd, two major solar panel producers, are suspending some production in Southeast Asia following the expiration of a US tariff reprieve on solar panels from specific Southeast Asian countries. LONGi suspended production at a battery plant in Viet Nam, which accounts for less than 10% of its total battery production capacity. Trina Solar announced maintenance shutdowns for its facilities in Thailand and Viet Nam, primarily serving the US market. LONGi’s other plants in Malaysia and Viet Nam remain operational. The tariffs aimed to prevent companies from bypassing US duties on Chinese goods by completing panels in Southeast Asia. Trina Solar is constructing new cell and module capacity in Indonesia, with operations expected to begin in the third quarter, in partnership with Indonesian state-owned utility PT PLN (Persero).

INDONESIA
Government designates Tanjung Sauh island as special economic zone
(13 June 2024) Indonesia has designated Tanjung Sauh island as a special economic zone to foster job creation and economic development. The zone spans 840.67 hectares and will house electronic component industries, electronic product assemblies, and a centre for alternative energy research and production. It will be supported by a port with a capacity of 5 million TEUs, enhancing logistical connections between Batam and Bintan trade centres and international markets. The zone has secured investment commitments of 199.6 trillion rupiah (approximately US$12 billion) and is projected to generate 366,087 jobs by 2053.

INDONESIA
President-elect Prabowo Subianto to increase debt-to-GDP ratio towards 50% over next five years
(14 June 2024) Indonesia’s President-elect Prabowo Subianto plans to increase the debt-to-GDP ratio by 2 percentage points annually over the next five years, reaching approximately 50% by the end of his term, up from about 39% currently. This gradual increase aims to allow the economic team to adapt to any headwinds. This marks a significant shift for Indonesia, which has maintained a conservative fiscal policy post-1997 Asian Financial Crisis, except during the COVID-19 pandemic. The proposed increase is intended to reassure investors while maintaining fiscal prudence, keeping the ratio below 60%. Prabowo’s spending plans, including free lunches for children, are projected to cost up to 460 trillion rupiah (US$28 billion) annually. The high interest-rate environment and currency volatility pose challenges to borrowing. Indonesia’s current government spends 500 trillion rupiah annually on interest payments, consuming 15% of the budget.

SINGAPORE
Prime Minister Lawrence Wong visits Brunei Darussalam and Malaysia from 11-12 June
(10 June 2024) Prime Minister Lawrence Wong will visit Brunei Darussalam and Malaysia from 11-12 June, as announced by the Prime Minister’s Office on Monday. This marks Wong’s first overseas trip since taking office last month. In Brunei, he will have a royal audience with Sultan Hassanal Bolkiah and Queen Saleha and attend an official lunch hosted by the Sultan. Accompanying Wong will be his wife Loo Tze Lui, Foreign Affairs Minister Vivian Balakrishnan, Minister for Sustainability and the Environment Grace Fu, National Development Minister Desmond Lee, and Minister of State Rahayu Mahzam. On Tuesday evening, Wong will travel to Malaysia to meet Prime Minister Anwar Ibrahim and other Malaysian leaders. During his absence, Deputy Prime Minister Gan Kim Yong will serve as Acting Prime Minister.

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NEW ZEALAND, ASEAN
New Zealand enhancing cooperation with ASEAN on regional stability and climate change
(11 June 2024) New Zealand is enhancing cooperation with ASEAN to promote regional stability and address challenges such as climate change, as stated by Deputy Prime Minister Winston Peters. Peters emphasised the importance of robust relations with ASEAN for New Zealand’s active regional participation. He suggested closer collaboration in developing green energy and hydrogen, and sharing agricultural expertise. Peters highlighted the significance of multilateral frameworks for smaller countries, advocating for collective action to defend rights and uphold values of freedom, democracy, and the rule of law. Trade between ASEAN and New Zealand reached US$14.92 billion in 2022, with next year marking their 50th anniversary of dialogue relations.

JAPAN
Japan’s economy expands by 0.6% in April 2024, driven by recovery in auto manufacturing
(12 June 2024) Japan’s economy grew by an annualised 0.6% in April 2024, driven by a recovery in automobile shipments, according to the Japan Center for Economic Research (JCER). This followed a 0.3% GDP growth in March. Private final consumption increased by 0.5% and private residential investment by 1.3%, reversing declines of 0.9% and 2.3% in March, respectively. Exports rose by 0.4% in April, while imports fell by 0.8%, further boosting GDP growth. JCER noted that the increase in automobile-related exports contributed significantly to this improvement. However, JCER expressed caution regarding private consumption, citing weak underlying trends based on credit card usage and consumer confidence data. Private-sector capital investment declined by 0.2% from March.

SOUTH KOREA
South Korea to extend ban on short-selling of stocks until 30 March, 2025
(13 June 2024) South Korea will extend its ban on short-selling stocks until 30 arch, 2025, to develop an electronic system to prevent illicit trading practices, particularly naked short-selling. The Financial Services Commission (FSC) announced this extension after the stock market closed on Thursday. The FSC plans to establish an electronic monitoring platform by March 2025, initially introduced in April to detect naked short sales. The FSC will also revise short-selling rules to balance opportunities between retail and institutional investors and increase fines for illegal trading practices. The ban, originally set to expire on 30 June, was requested to be extended by the ruling People Power party until the new system is operational. Short-selling has been banned since November 2023 due to concerns from retail investors about price declines and illegal trading. The extension has raised concerns among market analysts about its impact on market dynamics and South Korea’s potential inclusion in MSCI’s developed market index. Last week, MSCI downgraded South Korea’s short-selling accessibility in its annual review.

ASEAN
Chinese tech suppliers expand presence in ASEAN amid geopolitical tensions
(31 May 2024) Chinese tech suppliers are increasing their presence in Southeast Asia, where Taiwanese and other rivals have long been helping the likes of Google and Apple expand production. For instance, Google has selected Chinese supplier Goertek to produce Pixel watches in Vietnam starting in 2025, a role previously held exclusively by Taiwanese companies. Additionally, BYD is bidding to manufacture Pixel phones in Southeast Asia, though no decision has been made yet. The strategic shift is driven by business considerations such as quality, service, and competitive pricing. The presence of Chinese suppliers in Vietnam has grown significantly, with 37% of Apple’s suppliers in the country being Chinese. Political tensions and economic slowdowns in China are also pushing Chinese companies to seek growth opportunities abroad. Investments by Chinese and Hong Kong firms in Southeast Asia surpassed those from Singapore in 2023, reflecting a systematic diversification effort by Chinese suppliers. The expanding supply chain in Southeast Asia may draw increased scrutiny from the U.S., particularly concerning trade practices and the growing trade surplus with the region.

MALAYSIA, URUGUAY
Uruguayan government plans to expand collaboration with Malaysia in halal meat and dairy market
(05 June 2024) The Uruguayan government, through the Institute of National Meat of Uruguay (INAC), aims to expand its collaboration with Malaysia in the halal meat and dairy market. Malaysia’s Deputy Prime Minister discussed this during a meeting with Uruguay’s Minister for Livestock, Agriculture, and Fisheries. Uruguay produces 600,000 tonnes of beef annually, with 450,000 tonnes exported, predominantly to China. Malaysia sees potential in sourcing halal meat from Uruguay to bolster its own food security. The Malaysian government plans to position Malaysia as a hub for processing, storage, and transportation of halal meat, especially for the ASEAN market. Key Malaysian bodies, including Jakim and the Halal Development Corporation, have been auditing Uruguayan abattoirs for halal compliance.

SINGAPORE
Singapore’s casino resorts begins second phase of development
(01 June 2024) When Lawrence Wong took over leadership of Singapore last month, the focus shifted to the legacy of former Prime Minister Lee Hsien Loong, particularly the casino resorts which began operations in 2010 and have since contributed 1% to 2% of annual GDP and doubled tourist arrivals to 19.1 million by 2019. The second phase of development for these resorts is underway, with Genting Singapore’s Resorts World Sentosa planning to start construction on two new hotels with 700 rooms by the end of 2024, and Marina Bay Sands set to add a fourth hotel tower, a 15,000-seat arena, and other facilities, with completion expected by July 2029. Both resorts will also expand their casino floors, with Marina Bay Sands gaining an additional 2,000 sq. meters and Genting gaining 500 sq. meters. The expansion, originally approved in 2019 and delayed by the pandemic, now faces higher costs due to inflation, with Genting’s investment rising to SG$6.8 billion, while Sands anticipates exceeding initial projections.

THE PHILIPPINES
Government to reduce tariffs on rice from 25% to 15% through 2028 to combat inflation
(04 June 2024) The Philippines will reduce tariffs on rice from 35% to 15% through 2028 to combat inflation. The head of the National Economic and Development Authority stated the move aims to lower rice prices, making it more affordable, as rice comprises 9% of the consumer price index and has significantly driven recent inflation. While this reduction is expected to lower consumer prices, analysts express concerns that it could harm Filipino farmers by making imported rice cheaper than domestic products. The president is set to issue an executive order to implement the tariff cut, while tariffs on corn, pork, and mechanically deboned meat will remain unchanged through 2028. Analysts warn of the negative impact on farmers’ incomes and stress the need for government support programs to mitigate these effects.

INDONESIA
Indonesian rupiah declines to four-year low of 16,293 per dollar
(05 June 2024) The Indonesian rupiah declined to a four-year low of 16,293 per dollar on 05 June, 2024, marking its weakest point since April 2020. Bank Indonesia intervened in both spot and domestic non-deliverable forward markets to stabilise the currency, as confirmed by Edi Susianto. Governor Perry Warjiyo stated ongoing efforts to maintain rupiah stability amid market volatility. Contributing factors to the rupiah’s weakness include seasonal dividend and Hajj pilgrimage outflows, and a narrowing trade surplus. The rupiah is the worst-performing emerging-Asian currency this quarter. It has been noted that dividend payouts by Indonesian companies are adding to the currency’s challenges.

SINGAPORE
Singapore seeks bids for two hydrogen-ready gas-fired power plants
(04 June 2024) Singapore’s Energy Market Authority (EMA) has issued a request for proposals to build, own, and operate two hydrogen-ready gas-fired power plants, each with a capacity of at least 600 megawatts. These plants are expected to be operational by 2029 and 2030. This initiative follows a separate request in 2023 for a power plant to be completed by 2028. The demand for electricity in Singapore is rising, driven by electricity-intensive sectors such as advanced manufacturing and transport. Peak power demand is projected to increase by at least 3.7% over the next six years, potentially reaching 11.8 gigawatts by 2030. EMA’s chief executive emphasised the importance of ensuring sufficient generation capacity to meet the needs of homes, workplaces, and communities.

THAILAND
Thailand approves tax measures to stimulate domestic tourism during low season
(04 June 2024) Thailand’s cabinet approved tax measures on 04 June, 2024 to stimulate domestic tourism during the low season, from May to November. Deputy Finance Minister Paopoom Rojanasakul announced that the measures include tax deductions for companies organising conventions and seminars. Additional incentives allow income tax deductions for expenses on homestays and non-hotel accommodations in secondary cities. Prime Minister Srettha Thavisin noted that the measures will cost the government THB 1.5 billion baht (USD 41 million) in revenue, but he expects the benefits to outweigh the costs.

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CHINA
China’s manufacturing activity contracts in May after two months of growth
(31 May 2024) China’s manufacturing activity contracted in May, with the manufacturing purchasing managers’ index (PMI) falling to 49.5 from April’s 50.4. This marks a return to contraction after two months of growth. The new order index dropped by 1.5 percentage points to below 50, indicating slowed demand in the manufacturing sector. Nonmanufacturing business activity also declined, with the index slipping 0.1 points to 51.1, influenced by downturns in the real estate and financial sectors. It is believed that the recovery has lost momentum and anticipated that increased fiscal support and property stimulus might boost short-term growth. Morgan Stanley economists highlighted structural imbalances, citing excess capacity and weak corporate margins due to the shift of credit from property to industrial investment. Official data showed ongoing challenges from soft domestic demand and a struggling property sector, which impacts consumer confidence and overall economic growth.

SOUTH KOREA
South Korea’s economy grows 4.9% more than previously thought every year on average since 2000
(06 June 2024) According to the Bank of Korea, South Korea’s economy has been revised to have grown 4.9% more on average annually since 2000, increasing the 2022 nominal GDP to 2,401 trillion won from a previous estimate of 2,236 trillion won. This revision lowers debt-to-GDP ratios, with household debt falling to 93.7% from 100.6% and government debt to 51.4% from 55.3%. The Bank of Korea’s updates incorporate new concepts, methodologies, and a base year change to 2020 from 2015. The manufacturing sector’s economic share grew, while services and construction shrank. In the first quarter, real GDP expanded 1.3% from the previous quarter, matching preliminary data, but year-on-year growth was slightly revised to 3.3% from 3.4%. Inflation slowed to 2.7% in May, maintaining speculation of a potential interest rate cut later in 2024 despite the current restrictive 3.5% benchmark rate. The BoK revised its 2024 economic outlook upwards following a stronger-than-expected first-quarter performance.

JAPAN, THAILAND
Japanese seafood distributors targeting Thailand as key market
(07 June 2024) Japanese seafood distributors are targeting Thailand as a key market following China’s ban on Japanese seafood imports. Yokohama-based Sprout Investment organised a tasting event in Bangkok in April 2024, showcasing sashimi from bonito and mackerel, which impressed local restaurant owners. Sprout, operating over 20 izakaya pubs in Japan and one in Bangkok, plans to enter the Thai seafood wholesale market by August, sourcing mainly from Chiba prefecture’s Boso Peninsula. Tokyo-based Uoriki aims to open up to 100 outlets in Thailand within five years, having formed a joint venture with Charoen Pokphand Group and opening its first outlets in October 2023. Uoriki plans to expand beyond Bangkok to cities like Chiang Mai and collaborate with Central Group. As incomes rise in Thailand, Japanese food, once a luxury, has become more common, supported by an improved cold chain.