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ASEAN+3 Regional Economic Outlook in Five Charts

ASEAN+3 growth in 2022 is projected at 3.3 percent, mainly driven by robust economic activity in ASEAN. Growth is expected to strengthen to 4.3 percent in 2023, buoyed by the economic reopening in China and the resumption of international tourism. Here are the region’s prospects summarized in five key charts, as seen in AMRO’s latest ASEAN+3 Regional Economic Outlook.

1. Exports are losing momentum. ASEAN+3 exports have been falling since July 2022, mostly due to weakening global demand (Figure 1). In China, strict pandemic containment measures weighed on factory activity, especially in the fourth quarter. The global tech downcycle, reflected in weaker demand for electronic products, also held back ASEAN trade performance, a trend that may persist in the coming months given slower growth in the global economy.

2. Tourism will provide some reprieve. Monthly tourist arrivals picked up in September 2022, with the number of visitors to ASEAN-5 reaching nearly half of pre-pandemic levels (Figure 2). Travel and tourism growth in the region has accelerated as travel restrictions were lifted and international flights resumed. By the fourth quarter of 2022, most economies had removed all pandemic-related border measures. Tourism activity in the region is on track to increase further, boosted by the reopening of China’s international borders in December.

3. Commodity prices have turned around. Oil, gas, wheat, and palm oil prices have returned, or are close to levels seen before the Russia-Ukraine conflict (Figure 3). This turnaround in prices is mainly due to weaker global demand, gas rationing in Europe, and the extension of the Black Sea Grain Initiative to facilitate grain exports from Ukraine. With the fall in global food and energy prices, headline inflation is expected to moderate to 4.5 percent in 2023 from 6.3 percent in 2022.

4. Growth to improve in 2023. Plus-3 economies are likely to post a stronger growth of 4.2 percent in 2023, an increase from 2.6 percent in 2022. The pick-up in growth is projected to be led by China and Hong Kong, which are forecast to rebound strongly with the removal of pandemic containment measures. ASEAN is forecast to continue expanding, albeit at a more moderate pace of 4.8 percent in 2023.

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