Southeast Asia’s economies continue to sustain their growth momentum in the first quarter 2024. GDP grew in all economies, with growth in Indonesia, Malaysia, the Philippines, and Singapore increasing during this period, while Thailand and Vietnam recorded slower growth. Strong domestic demand, backed by tight employment markets and stable prices, along with strong performance particularly in tourism and a recovery in export markets helped sustained growth in this quarter.
The view for 2024 continues to be cautiously optimistic, in an external environment that continues to deliver mixed outcomes and present significant challenges. China, a key economic partner for the region, showed stronger performance in the first quarter 2024, which has propped up demand in Southeast Asia, while growth in the United States came in slower than expected.2 Ongoing geopolitical conflicts and tensions, as well as continued uncertainty and fragility in global markets, could pose challenges to the region.
Macroeconomic outlook - GDP
The region sustained its growth trajectory with Indonesia, Malaysia, the Philippines, and Singapore recording stronger growth in the first quarter 2024 compared to the previous quarter. Strong performance in tourism was one the key contributory factors driving growth across most markets. The Philippines recorded the largest expansion, attaining 5.7 percent growth, with Vietnam and Indonesia following closely at 5.6 percent and 5.1 percent, respectively.
Trade momentum
Trade performance appears to be turning the corner with promising outcomes seen across most markets. Gradual improvement in demand from major trading partners, such as China, Japan, and the United States, supported regional markets, with sectors including electronics seeing stronger demand. Vietnam’s exports grew very strongly at 18.0 percent year-on-year while the Philippines saw a rebound in exports to grow at 7.5 percent, having contracted in the previous quarter. Thailand, however, experienced a 1 percent contraction in exports, having rebounded in the previous quarter.
Capital flows
Foreign direct investment (FDI) broadly grew across the region, with Thailand seeing its FDI inflow double in the first quarter 2024, while the Philippines recorded a two-year high in February 2024 with US $1.4 billion. Singapore saw a slight decline of 3.81 percent but continues to stay well ahead and attain a significant share of the region’s FDI at US $32.7 billion.
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