In a recent report titled “ASEAN’s Consumer Activity Is Losing Steam,” S&P Global Ratings forecasts a gradual slowdown in consumer activity across the ASEAN region in 2024.
This projection comes in light of softening consumer confidence and the implementation of tighter monetary policies, adding pressure points such as lower income growth.
Last year saw robust growth in consumer activity in ASEAN, but the report suggests that this momentum will moderate in the current year. As confidence weakens and monetary policy measures begin to have an impact, consumer spending is expected to ease.
Despite these challenges, S&P Global Ratings remains optimistic about the region’s consumer market, emphasizing that ASEAN will continue to be the fastest-expanding consumer market globally.
This optimism is underpinned by the region’s high underlying economic growth and supportive labor markets, which are expected to mitigate the impact of the slowdown in consumer activity.
The report highlights specific factors influencing consumer activity in key ASEAN countries, namely Vietnam and Thailand.
In Vietnam, S&P states that consumption is anticipated to improve after experiencing sluggish growth during the economic downturn in 2023. This positive outlook is driven by factors such as economic recovery efforts and potential fiscal stimulus measures.
As for Thailand, the report says a proposed fiscal stimulus measures are expected to bolster consumer activity in Thailand if they come into effect this year. However, the effectiveness of these measures remains contingent on their implementation.
In conclusion, while ASEAN faces challenges such as softening consumer confidence and tightening monetary policies, S&P Global Ratings maintains confidence in the region’s consumer market due to its underlying growth momentum.
