Five Key Issues in 2024 For Buinessses in Asia

The commercial focus in 2024 will shift from recovery to growth. While low growth will characterize the global economy, regional drivers should see some Asian economies expand at above-average rates. The OECD forecasts that India (6.1 percent), Indonesia (5.2), and China (4.7) will outpace all other G20 economies in 2024. South Korea and Australia both make the top 10 with growth forecasts of 2.3 percent and 1.4 percent, respectively. 

EIU’s Asia Outlook 2024 stated that Asia is expected to account for 60 percent of global GDP growth in 2024, higher than the pre-pandemic average. Over the next 10 years, it identifies Bangladesh, Indonesia, Vietnam, Malaysia, and the Philippines as high-performing economies.

Artificial intelligence (AI) is not new, but it was among 2023’s biggest stories. The computing power of generative AI is moving stock markets and driving structural transformations in trade, finance, manufacturing, logistics, retail, healthcare, education, and travel. In every sector, AI has become an indispensable aspect of strategic investment planning.

In 2023, businesses worldwide rolled out AI-enabled solutions. A new global tech race took shape with contrasting AI platforms in the US and China. Calls strengthened for regulations to slow the pace of AI utilization. The EU passed an Artificial Intelligence Act, and other new regulatory frameworks may follow. Nevertheless, 2024 will bring a new generation of AI applications designed to improve operational efficiency and reframe customer relationships.

International travel rebounded in 2023 as passengers took off for business and leisure. In October, global air capacity matched 2019 for the first time since COVID-19. The UNWTO forecasts a 90 percent global tourism recovery in 2023. Asia remained around 20 percent behind 2019 travel volumes, but the return of travel is stimulating investment in airports, high-speed railways, conference facilities, duty-free retail, and mixed-use developments.

Regional governments expect vibrant growth in 2024. This should drive retail spending and diversification in medical and educational travel. To entice more visitors, Thailand and Malaysia are waiving visas for citizens of key markets, like India and China, and China, and Singapore will launch a bilateral visa-free travel scheme. South Korea will double the tax refund limit to incentivize tourists to shop more while visiting.

In Southeast Asia, retailers often offer around 10 e-wallet options, and in India, merchants manage up to 100 e-wallets. Most are not interoperable, creating pain points for consumers, travelers, and SMEs sourcing regional supplies. The Mastercard Borderless Payments Report shows that 61 percent of SMEs in 15 countries, including China, India, Singapore, and the Philippines, sourced more suppliers internationally in 2023 than 12 months ago.

SMEs need to know when payments reach a supplier, and payment providers are improving process efficiency and cost transparency. The ASEAN Payment Connectivity Initiative aims to develop “faster, cheaper, safer, more transparent cross-border payment systems to support regional economic growth”. Singapore is piloting real-time QR code payments with Indonesia and Malaysia for sending and receiving funds and making transactions. More regional pilot programs will be introduced in 2024.

National elections can reframe the economic priorities in a market, and the outcomes of some polls have macroeconomic and geostrategic influences. The US presidential election in November will dominate global news. However, 40 elections involving 41 percent of the global population will take place in 2024. Businesses worldwide will scrutinize the results to plan and manage their future investments.

In Asia, India heads to the polls in April, and Indonesia votes in February. Taiwan’s presidential election in January could influence near-term its relations with China, while Singapore’s general election in September will end Prime Minister Lee Hsien Loong’s 20-year tenure.