As widely expected, the GDP growth target was set at “around 5%”, on par with last year’s objective (Fig 1 and Table 1). Without the low base effects of 2022 and in the absence of a burst of “revenge spending”, achieving the same GDP target this year be more difficult. It will hence need a stronger boost from net exports and investment. We expect that GDP growth 4.5% to 5.5% will be within policymakers’ comfort zone, below which may trigger more forceful policy measures. The CPI inflation target was set at 3%, a perennially steady objective. Given that headline inflation is currently negative, we expect it to average 1.1% in 2024. Although CPI inflation has fallen short of its target since 2012 (Fig 2), maintaining the 3% goal should help anchor inflation expectations of businesses and households, and keep deflationary pressures at bay.- Maybank
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