Enviable growth, but M&A ebbs

In many ways, APAC is on a divergent path to the rest of the world. Its economic growth rates continue to far outpace those of other regions. The IMF has revised its forecast upward to 4.5% for 2024, from an earlier projection of 4.2%, driven by strong domestic demand and a supportive external environment.

The conditions around inflation are also very different to Europe and the US. For example, China is experiencing very low levels of inflation, with consumer prices having risen by only 0.1% year-on-year in March. This follows a slight rebound from a deflationary period, when in January the country saw its sharpest drop in consumer prices in more than 14 years, at minus 0.8%. And though much has been made of China’s economic deceleration, it is still on track to record growth of 4.6% this year.

Indian bull market

India’s economy, if not free of challenges, is going from strength to strength. GDP expansion is projected at around 6.5% for both 2024 and 2025, and in March the country’s manufacturing sector achieved a notable high, with the Purchasing Managers’ Index (PMI) reaching 59.1, the highest level since 2008. This surge reflects significant growth in new orders and job creation across the manufacturing industry. The services sector also recorded robust performance, with the Services PMI climbing to 61.2.

Overall, APAC is the most dynamic and robust regional economy in the world, and is posting readings that most other markets would envy. And yet, following one of the weakest years for M&A in 2023, Q1 2024 still proved sluggish. With the exception of China and Japan, dealmakers in APAC continue to hold out for looser credit conditions, which will only materialize when inflation is brought down around the region.

Published in association with Datasite, Deal Drivers APAC provides an in-depth review of M&A activity in Q1 2024, as well as an outlook for the year ahead.

The report is also available on datasite.com.