ASEAN Economists Yun Liu and Aris Dacanay discuss key themes shaping ASEAN's economic landscape, including challenges in Vietnam's property market, impressive growth in the Philippines, Malaysia's strong FDI situation, Indonesia's macroeconomic stability, the travel sector in Singapore, Malaysia, and Vietnam, and the growth and interest rates in ASEAN's equity market.
Foreign direct investment continues to flow into Vietnam despite trade challenges, with investors building up factories.
The Philippines' favorable demographic trend attracts consumer-related foreign direct investment.
Deep dives
Vietnam's trade challenges and the resilience of FDI
Vietnam has been facing trade challenges, with declining export numbers and falling orders from the West. However, foreign direct investment (FDI) in Vietnam remains decent, as it reflects a medium to long-term perspective. Despite near-term trade difficulties, FDI continues to flow into Vietnam, with foreign investors building up factories. The country is also addressing challenges in the property sector through proactive measures, such as credit packages, in order to stabilize the market.
The Philippines: Impressive growth, inflation, and FDI
The Philippines has experienced impressive economic growth in recent years, with GDP growth rates above 7%. However, the country is facing challenges related to high inflation rates, which have led to aggressive rate hikes. Consumption, fueled by resilient individuals dipping into their savings, may eventually need to slow down to restore balance in the economy. Foreign direct investment levels in the Philippines, although not the lowest in the region, are somewhat underrated. The country's favorable demographic trend, with a young population, attracts consumer-related FDI.
Thailand's declining demographic trend and challenges in tourism
Thailand's future demographic trend indicates a decline, affecting the potential market base for investors seeking opportunities. The country also struggles with high household debt, making it difficult to stimulate domestic consumer markets. Tourism, a significant sector for Thailand, has faced challenges due to the slower return of mainland Chinese tourists than anticipated. Although flight capacity has recovered, tourism arrivals have plateaued due to demand issues. Despite these challenges, Thailand exports the popular fruit Durian to China, playing a notable role in the economy.