Southeast Asia to outpace China's GDP growth and foreign investment

1. Southeast Asia is likely to outpace China’s economic growth and inflow of foreign direct investments over the next ten years, a new study led by a Singapore-based think tank showed, as the region benefits from growing demographics and a global supply chain shift.

2. The Southeast Asia Outlook 2024–2034 report, which was released on August 1 by Angsana Council, US consultancy Bain & Company, and Singapore’s DBS Bank, projected the gross domestic product of six regional economies: Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

3. According to the study, GDP for the six key economies is expected to increase by an average of 5.1% annually until 2034, outpacing China’s projected growth of 3.5–4.5%.

4. By country, Vietnam is expected to lead with 6.6%, followed by the Philippines with 6.1%, while Singapore—the slowest among the six—is expected to manage 2.5%.

Fastest-growing countries in Southeast Asia and FDIs Embracing Innovative Technologies

1. A report titled "Navigating high winds: Southeast Asia Outlook 2024-34" was released on August 1, compiled by the Development Bank of Singapore, consulting firm Bain & Company, and Angsana Council.

2. The report forecasts the expected growth of the six largest Southeast Asian economies of Vietnam, Singapore, Malaysia, the Philippines, Indonesia, and Thailand.

3. According to the report, over the next decade, Southeast Asia will likely grow faster than the previous decade, with higher GDP growth and higher total foreign direct investment (FDI) than China. Southeast Asia’s growth will be driven by stronger domestic economies and a resurgence in investment catalysed by China + 1 supply chain shifts.

4. Specifically, Southeast Asia is predicted to grow GDP by 5.1 per cent, on average, in the next decade. Vietnam and the Philippines are expected to be the faster-growing countries, with Vietnam remaining in front.

5. "Vietnam is forecast to maintain a GDP growth rate of 6.6 per cent in the 2024-2034 period and its export-oriented economy is well-positioned to capture China + 1 opportunities," the report said. "The country also boasts a highly diverse source of FDI, productive interprovincial competition, and high-quality workforce and education levels."

6. To grow faster than the forecasts, Southeast Asia should invest in new growth sectors, foster tech-enabled disruptors, expand capital markets’ breadth and depth, and accelerate the green transition, the report added. The region should also commit to growth-friendly multilateral initiatives, including the Regional Comprehensive Economic Partnership, the Belt and Road Initiative, and a transnational electricity grid.