Southeast Asia’s economy is projected to grow by 4.3 per cent this year and by 4.2 per cent in the next, below the pre-pandemic average of 5 per cent per year, according to the latest Economic Insight report for Southeast Asia, commissioned by the Institute of Chartered Accountants in England and Wales and Oxford Economics.

The region has displayed resilient economic momentum in the third quarter (Q3) this year, with improved trade conditions driving gross domestic product (GDP) growth to surpass expectations.

Export growth in Singapore, Vietnam and Malaysia expanded from Q2 to Q3, with the first two nations enjoying notable turnarounds. The region’s exports will likely be weighed down by a prolonged global weakness, particularly from the United States and China, a Vietnamese media outlet report citing the document.

Vietnam's economy will grow by 4.7 per cent this year and by 5 per cent in the next, with a bright medium-term outlook. Overall growth there next year is expected to be subdued by normal standards. The pre-pandemic growth trend was around 7 per cent in the country.

Vietnam has emerged as a key winner amid the global supply chain reshuffling, and its share of global goods exports should rise further over the medium term, spurred by the ‘China Plus One’ strategy of multinationals, the report predicts.

That should drive Vietnamese GDP outperformance relative to the country's ASEAN peers until at least 2030, it notes.

Though economic momentum picked up in the third quarter this year in Vietnam, concerns exist about potential headwinds next year, the report says.

Factors weighing down the 2024 forecast for Vietnam include US- and China-led slow global growth, tourism bright spots losing their shine and declining private consumption.

Singapore's economy enjoyed robust 1.4 per cent quarter-on-quarter growth in the third quarter this year, driven by a turnaround in exports and manufacturing activity. The GDP growth forecast for this year for the country is 0.7 per cent, down from 3.6 per cent last year.

While the United States will probably avoid a recession, an extended period of poor growth is likely ahead, the report notes.

Other advanced economies are set to be sluggish due to past policy tightening, while China’s spending will remain subdued as it faces its internal problems, it adds.

Fibre2Fashion News Desk (DS)

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