Foreign direct investment (FDI) inflows into the ASEAN region for the 2021 calendar year reached a record level of USD 174 billion, equaling the pre-pandemic high recorded in 2019.
Key drivers for rising FDI inflows into Southeast Asia include diversification of manufacturing supply chains by multinationals, as well as new investments to tap rapidly growing consumer markets in ASEAN.
Strong FDI inflows into electronics manufacturing, and also projects related to electric vehicles, were important contributors to the high level of FDI inflows recorded in 2021.
ASEAN FDI inflows have grown rapidly
FDI inflows into the ASEAN region have grown steadily over the past decade, albeit temporarily disrupted during 2020 due to the pandemic. The total annual level of FDI inflows has risen from around USD 120 billion per year during 2013-2015 to an annual level of USD 174 billion in both 2019 and 2021.
Strong FDI investment inflows in 2021 were helped by rapid growth in manufacturing FDI, which rose from USD 19 billion in 2020 to USD 45 billion in 2021. This was boosted by large investments in electronics manufacturing as well as FDI into electric vehicle (EV) manufacturing and EV battery plants. Indonesia has become an important hub for EV battery manufacturing as it has the world's largest nickel reserves as well as a being a large Asian manufacturing hub for autos.
The electronics industry is already an important part of the manufacturing export sectors of a number of ASEAN economies, including Singapore, Malaysia, Thailand, Vietnam and Philippines. Consequently these countries have been attracting new FDI inflows into the electronics sector as multinationals try to expand their production capacity given strong growth in global electronics demand since 2020.
Comentários