Page 9 - Policy Economic Report - November 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Inflation Outlook: -

• Average inflation is projected to drop to 2.2 percent in 2024, before a mild resurgence to 2.6
percent in 2025.

• In advanced Asia excluding Japan, disinflation is projected to continue as the lagged impact of
past monetary tightening weighs on wage growth and reins in services inflation. For 2024, average
inflation of 2.5 percent is expected, receding further to 2.3 percent in 2025.

• In Japan, after the successful exit from unconventional monetary policy, the 3.5-percent boost in
nominal wages from the Shunto wage negotiations is expected to support re-anchoring inflation
at the Bank of Japan’s target. Inflation rates of 2.2 percent and 2.0 percent are forecast for 2024
and 2025, respectively.

• In emerging Asia, average 2024 inflation is projected at 2.1 percent—the lowest rate in almost 25
years. In 2025, inflation is expected to recover to 2.7 percent, largely reflecting the gradual
normalization of inflation rates in China and Thailand, which are currently at very low levels.

Global PMI

• The J.P.Morgan Global PMI Composite Output Index - produced by S&P Global - registered 52.3
in October 2024, up from 51.9 in September 2024. The latest reading indicated the rate of global
growth had picked up from the eight-month low in September but remained below the long-run
average. The latest reading is broadly indicative of the global economy growing at an annualized
rate of 2.6%, slowing from the 2.9% expansion in the second quarter and was also below an
average GDP growth rate of 3.1% in the decade prior to the pandemic.

• The latest global economic expansion was driven by a solid rise in services activity. Detailed sector
data revealed that financial services and telecommunication services led growth among the main
industries tracked, with consumer services activity also further expanding.

• Manufacturing output rose only fractionally after falling for the first time this year in September.
Improvements in business optimism across both manufacturing and service sectors hinted at
further expansions in output in the coming months, though the improvement was focused on the
United States, with sentiment cooling in Europe and across much of Asia amid concerns over
geopolitics.

November 2024 Page | 8