After a period of deceleration in 2023, the economy is witnessing some early signs of revival in 2024. Export activities are rebounding, while domestic consumption and private investment are also on an upward trajectory. Export volumes are expected to rise by 3.5 percent in 2024, reflecting an improving global demand. Furthermore, the real estate sector is anticipated to undergo a robust recovery later this year and next year, stimulating domestic demand as both investors and consumers regain confidence. Total private investment and consumption are forecasted to increase by 5.5 percent and 5 percent, respectively, in 2024.
The report advises speeding up the implementation of public investment projects to boost the economy. "Investing in public infrastructure projects brings long-term benefits alongside immediate economic stimulus," remarked Sebastian Eckardt, Practice Manager for Macroeconomics, Trade and Investment in the East Asia and Pacific Region. Meanwhile, regarding monetary policy, the scope for interest rate cuts is considered limited due to the interest rate gap between the domestic and international markets.
The budget deficit is expected to rise to 1.6 percent of GDP in 2024 before decreasing to 1.1 percent in 2025, in line with the fiscal strategy for the 2021-2030 period.
Experts from this financial institution stress that maintaining financial sector stability remains paramount, with a particular focus on managing risks related to increasing non-performing loans, including those arising from declining property values in the real estate market.
Additionally, the report suggests supporting innovative startups to boost productivity growth. "Significant structural barriers still exist across various sectors, including legal obstacles, growing skill shortages, low technology adoption rates, and challenges in accessing early-stage finance," the report highlights.
