KUALA LUMPUR, June 10 — The gross domestic products (GDP) growth of six Asean countries will recover to 4.5 and 4.7 per cent in 2024 and 2025, respectively, from 4 per cent last year, revealed a Maybank Research Pte Ltd forecast.
In its Asean Frontiers: The New Trailblazers report, the research house said the GDP recovery will be driven by manufacturing and exports, particularly electronics, which are supporting a modest growth recovery in the first half of the year.
Maybank Research said the artificial intelligence (AI) and data centre boom, and broadening global electronics demand, are brightening the trade and foreign direct investment (FDI) outlook.
Despite elevated interest rates, strengthening economic activities have resulted in loan growth picking up across Asean, it said.
“Visa waivers in Malaysia, Thailand and Singapore and a ramp-up in flight capacity are boosting Chinese tourists to Asean,” it said.
Maybank said Asean’s inflation rate has fallen sharply from its highs last year as supply chain disruptions from the Russia-Ukraine war dissipate.
“Asean central banks are however constrained from trimming policy rates, as a resilient United States economy and ‘higher for longer’ United States interest rates have increased pressures on emerging market currencies.
“We expect the United States’ Federal Reserve to cut the Funds rate by only 50 basis points in 2024, starting September,” it added.
Maybank noted that Asean has emerged as a preferred destination as multinational companies diversify their manufacturing supply chains away from China.
FDI approvals and applications to several Asean countries, including Malaysia, Thailand, Vietnam and Indonesia, have sharply risen.
Private investment strengthened in the first quarter of this year in Malaysia, Vietnam, Thailand and Indonesia, suggesting the recent surge in FDI pledges is materialising.
Asean countries are securing investments not just from the United States and its allies, but also from China, as the country’s FDI has increased strongly in Vietnam, Thailand and Malaysia since the reopening.
“Leading the overseas push are champion industries like electric vehicles, solar energy and tech suppliers,” it said.
Malaysia appears to be drawing the biggest investments in data centres as AI spurs an investment boom in this sector across Asean.
The report said this could partly be due to Singapore restricting new data centre construction due to environmental concerns involving heavy energy and water use.
Malaysia has drawn investments from Google, Nvidia, GDS and Equinix while Thailand has secured investments from Amazon, Microsoft and Google.
“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,” it said.
— Bernama
