The International Monetary Fund ( IMF ) projects that Vietnam, the Philippines and Cambodia will post the fastest economic growth this year among members of the Regional Comprehensive Economic Partnership ( RCEP ) free-trade agreement, followed by Indonesia, China, and Malaysia.

According to the IMF’s World Economic Outlook released in Washington on October 22, GDP growth is forecast to accelerate from 5.0% last year to 6.1% in 2024 in Vietnam, from 5.5% to 5.8% in the Philippines, and from 5.0% to 5.5% in Cambodia.

Indonesia’s economy is projected to expand at a slower pace of 5.0% — unchanged from last year. China and Malaysia are both seen growing 4.8%, down from 5.2% in China last year, but up from 3.6% in Malaysia.

China’s slowdown eclipsed by India’s

Among Asia’s major emerging and developing economies, China’s projected  slowdown is eclipsed by weaker economic activity in India ( not an RCEP member ), where GDP growth is forecast to slow from 8.2% to 7.0%.

In India, “pent-up demand accumulated during the pandemic has been exhausted, as the economy reconnects with its potential,” the IMF outlook says.

“In China, the slowdown is projected to be more gradual … largely thanks to better-than-expected net exports” — and notwithstanding “persistent weakness” in the real-estate sector and Chinese consumer confidence.

Among the advanced economies in the 15-member RCEP, growth is projected to rebound from 1.1% to 2.6% in Singapore and from 1.4% to 2.5% in South Korea.

Elsewhere, anaemic growth is forecast for Japan ( 0.3%, down from 1.7% last year ) and Australia ( 1.2%, down from 2.0% ). Zero growth is expected in New Zealand ( down from 0.6% ).

Among the remaining RCEP members, growth is expected to accelerate from 3.7% to 4.1% in Laos, from 1.9% to 2.8% in Thailand, and from 1.4% to 2.4% in Brunei. Myanmar’s growth is forecast at 1.0%, down from 2.5%.

Inflation mostly subdued …

With the exception of Laos and Myanmar, inflation is forecast to be relatively subdued in RCEP economies at around 3% to 4% or lower this year.

For the whole region, “inflation in emerging Asia is projected to be on par with that in advanced economies, at 2.1% in 2024 and 2.7% in 2025, in part thanks to early monetary tightening and price controls in many countries in the region,” the IMF says.

… except in Laos and Myanmar

But in both debt-laden Laos and conflict-ridden Myanmar, consumer prices are forecast to skyrocket 22%, albeit down from around 30% last year.

Both countries have been struggling with balance-of-payments difficulties – especially Myanmar with its current account deficit forecast to balloon from 3.7% of GDP in 2023 to 3.9% this year.

On the other hand, Laos is expected to have a current account surplus of 2.4% of GDP this year, down from 2.7% last year and reversing a current account deficit of 3.0% of GDP in 2022.  

Among all emerging and developing regions, Asia is forecast to have the strongest growth of 5.3% this year – three times faster than the 1.8% projected for advanced economies.

Across emerging and developing Asia, consumer prices are projected to rise only 2.1%—compared with 2.6% in advanced economies and double-digit increases of up to 18% in other emerging and developing regions.

RCEP, which came into force from 2022, is the world’s largest free-trade agreement in terms of the combined GDP of its 15  members — Asean along with China, Japan and Korea plus Australia and New Zealand.

India was supposed to have been a member but withdrew from negotiations in 2019.  It retains the right to resume negotiations to accede to RCEP.

Overlapping RCEP is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership ( CPTPP ), a free-trade agreement between 11 countries — Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam. It entered into force from 2018, after the United States pulled out of negotiations.