The consumers across Asia Pacific region are likely to spend more on discretionary items such as travel and entertainment in 2024, according to the Annual Economic Outlook of the Mastercard Economics Institute (MEI).

The MEI today released the "Economic Outlook: Balancing Prices & Priorities" for the coming year, outlining the bright spots and watchouts that will define global growth, according to a press release.

As the economic ripple effects of the pandemic subside in 2024, Asia Pacific consumers should be able to allocate a larger share of their wallets to discretionary spend, it said.

This is in comparison to 2022-2023, years marked by high inflation, that caused essentials like groceries and fuel to take up a larger percentage of household budgets, leaving less money left over for "wants" or extras.

Mastercard Chief Economist for Asia Pacific David Mann said: "2024 is set to be a year of recalibration as consumers rebalance their wallets. And what the data shows is that people remain eager to travel and dine out, although levels vary from market to market."

Signifying another shift in demand, in 2024, consumers across Asia Pacific are expected to spend more on goods than they did in 2023, the press release said.

"This marks the start of a new cycle that will see growth rates for goods rebounding to pre-pandemic levels, reversing the 2022-2023 trend that saw consumers prioritising key 'out-and-about' services such as dining and 'revenge' travel as economies re-opened post-pandemic."

In 2024, the rising demand for goods, such as household items and clothing, is expected to resuscitate the Asia Pacific manufacturing sector, which plays a crucial role in the global economy.

"This shift will drive a convergence in performance between the manufacturing and services sectors in the region which trended in opposite directions as manufacturing lagged and services boomed in 2023," Mastercard said.

According to the report, while there is no one-size-fits-all story for the Asia Pacific region, the macro picture is expected to be one of modest growth, largely on par with 2023 levels, as economies continue to stabilise and key drivers of growth, like exports and tourism, edge closer to pre-pandemic norms.

"Drilling down into individual economies, growth expectations are mixed across the region."

On one end of the spectrum, Singapore, Malaysia, the Philippines, Thailand, Taiwan, and South Korea should see upticks while slowdowns are anticipated in Australia, the Chinese Mainland, Japan and New Zealand. India and Indonesia are expected to hold largely steady at 2023 levels, it said.