- In December 2024, the U.S. economy showed signs of resilience and growth across key sectors, with the Manufacturing and Services PMI reflecting positive momentum. The labor market remained robust as the unemployment rate declined to 4.1% (year-on-year/ yoy), driven by strong job growth in healthcare and retail. Inflation rose to 2.9% (yoy), driven by low base effects from last year, particularly for energy. At the same time, the latest FOMC Minutes indicated increasing concerns over inflation risks and the potential need to recalibrate monetary policy easing.
- The Euro Area’s economic indicators presented a mixed picture. The Euro Area’s annual inflation rate increased to 2.4% (yoy) in December 2024, the highest level since July 2024. Retail sales posted a modest annual increase of 1.2% in November 2024. However, consumer confidence continued its downward trajectory, as consumers grew increasingly pessimistic about the economic outlook and their spending intentions. On the external front, the region recorded a trade surplus of EUR 16.4 billion in November 2024, though both exports and imports contracted, signaling potential headwinds for trade.
- In Q4 2024, China’s GDP growth expanded by 5.4% (yoy), accelerating from the 4.6% (yoy) growth recorded in the previous quarter. This marks the strongest annual growth rate in one and a half years, supported by a series of stimulus measures implemented since September 2024 to boost recovery and regain confidence. For the full year of 2024, China’s economy grew by 5.0%, aligning with the government’s target of approximately 5%. Sluggish domestic demand and the threat of a new trade war with the U.S. might undermine optimism for a wider rebound in 2025.
- Bank Indonesia (BI) projects that growth in Q4 2024 may slow further following slower growth in Q3 2024. In response to this, BI has adopted a pro-growth policy by lowering the benchmark interest rate (BI rate) by 25 basis points to boost economic growth. Despite, inflation projected to be remaining within the BI’s target (1.5%-3.5%) this year. Notably, manufacturing sectors, as biggest contributor in GDP Indonesia showed its best performance in this month, by increasing PMI to 51.20, marking its first expansion since July 2024. This was also accompanied an increase in Retail Sales Index and Consumer Confidence Index during the same period.
Toward Stronger Financial Industry in Indonesia