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ASEAN Economic Outlook 2023

- The ASEAN region will remain one of the fastest-growing regions of the world in 2023 but economic growth will likely fall marginally from 2022. This is largely due to worsening global economic conditions and tightening monetary policy.

- The second half of the year will likely see conditions that are more conducive to organic growth as falling inflation provides central banks with greater rate flexibility. This should complement increasing economic activity in China.

- The ASEAN region will remain attractive to foreign direct investment, with trends in commercial and state investment likely to remain consistent throughout the year, despite a more challenging macroeconomic environment.

The ASEAN (the Association of Southeast Asian Nations) region was among the fastest growing regions of the world in 2022 – the Asian Development Bank (ADB) predicted that economic growth in Southeast Asia will equate to 5.5 percent for 2022.

However, we enter 2023 with a host of evolving economic pressures. Some of which will undoubtedly act as a drag on growth globally. As such, the ADB recently revised its 2023 forecast to 4.7 percent for ASEAN as global demand weakens.

It is worth noting that forecasts do vary, and this can be partially dependent on how organizations categorize the region. Credit Suisse analysts expect the growth of the ASEAN-six economies – Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam – to moderate to 4.4 percent in 2023 from a projected 5.6 percent in 2022.

These figures put regional economic growth some way above the global average. The IMF has forecast global growth at 3.2 percent in 2022 and 2.7 percent in 2023. As such, ASEAN remains an attractive destination for international investment, providing investors with exposure to one of the fastest-growing regions globally.

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