KUALA LUMPUR (ANN/VIETNAM NEWS) – According to Maybank Research Pte Ltd’s forecast in their report titled ‘ASEAN Frontiers: The New Trailblazers’, the gross domestic product (GDP) growth of six ASEAN countries – Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam – is expected to rebound to 4.5 per cent in 2024 and further to 4.7 per cent in 2025, up from 4 per cent projected for 2023.
The recovery in GDP growth is attributed to manufacturing and exports, particularly in electronics, which have been pivotal in supporting a modest economic recovery in the first half of the year.
Maybank also said that artificial intelligence (AI), data centre boom, and broadening global electronics demand were brightening the trade and foreign direct investment (FDI) outlook.
Despite elevated interest rates, strengthening economic activities resulted in loan growth picking up across ASEAN, Maybank said.
Visa waivers in Malaysia, Thailand, and Singapore and a ramp-up in flight capacity are boosting Chinese tourists to ASEAN, according to the report.
Commenting on ASEAN’s inflation rate, Maybank said this had fallen sharply from its highs in 2023 due to supply chain disruptions from the Russia-Ukraine crisis.
ASEAN central banks are however constrained from trimming policy rates, as a resilient US economy and ‘higher for longer’ US interest rates have increased pressures on emerging market currencies, according to Maybank.
It is expected that the US Federal Reserve will cut the funds rate by only 50 basis points in 2024, starting from September.
Maybank also noted that ASEAN had emerged as one of the preferred destinations as multinational companies (MNCs) diversify their manufacturing supply chains away from China.
FDI approvals and applications to several ASEAN countries including Malaysia, Thailand, Vietnam, and Indonesia, had risen sharply.
Meanwhile, private investment strengthened in the first quarter of this year in Malaysia, Vietnam, Thailand, and Indonesia, suggesting that the recent surge in FDI pledges was materialising.
ASEAN countries are securing investments not only from the US and its allies, but also from China, as the country’s FDI has increased strongly in Vietnam, Thailand, and Malaysia since the reopening.
Malaysia appears to be drawing the biggest investments in data centres as AI spurs an investment boom in this sector across ASEAN. It has drawn investments from Google, Nvidia, GDS, and Equinix while Thailand has secured investments from Amazon, Microsoft, and Google.
Meanwhile, Indonesia has attracted Amazon, Alibaba, and Edgnex, among others and Vietnam’s nascent market has received commitments from the likes of Keppel, Alibaba, and Gaw Capital.
