KUALA LUMPUR, June 10 — The gross domestic product (GDP) growth of six Asean countries will recover to 4.5 and 4.7 per cent in 2024 and 2025, respectively, from 4.0 per cent in 2023, according to Maybank Research Pte Ltd forecast.

The Asean-six comprises Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

In a report “Asean Frontiers: The New Trailblazers”, the research house said the recovery in GDP growth will be driven by manufacturing and exports, particularly electronics, which are supporting a modest growth recovery in the first half of the year.

Maybank also said that artificial intelligence (AI) and data centre boom, and broadening global electronics demand are brightening the trade and foreign direct investment (FDI) outlook.

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Despite elevated interest rates, strengthening economic activities have resulted in loan growth picking up across Asean, Maybank said.

“Visa waivers in Malaysia, Thailand and Singapore and a ramp-up in flight capacity are boosting Chinese tourists to Asean,” it said.

Commenting on Asean’s inflation rate, Maybank said this has fallen sharply from its highs in 2023 as supply chain disruptions from the Russia-Ukraine war dissipate.

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“Asean central banks are however constrained from trimming policy rates, as a resilient US economy and ‘higher for longer’ US interest rates have increased pressures on emerging market currencies.

“We expect the US Federal Reserve to cut the Funds rate by only 50 basis points in 2024, starting from September,” it added.

Maybank also noted that Asean has emerged as one of the preferred destinations as multinational companies (MNCs) diversify their manufacturing supply chains away from China.

FDI approvals and applications to several Asean countries, including Malaysia, Thailand, Vietnam and Indonesia, have risen sharply.

Private investment has strengthened in the first quarter of this year in Malaysia, Vietnam, Thailand and Indonesia, suggesting that the recent surge in FDI pledges is materialising.

Asean countries are securing investments not just from the US and her 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 added. — Bernama