UOB: ASEAN-6 To Outpace Global GDP Growth In 2025 Amid Supply Chain Shifts, Investment Opportunities
KUALA LUMPUR, Dec 5 (Bernama) -- United Overseas Bank (UOB) forecasts that ASEAN-6 economic growth will reach 4.8 per cent in 2025, surpassing the projected global average gross domestic product (GDP) growth of 3.2 per cent.
UOB ASEAN economist Enrico Tanuwidjaja said Indonesia’s GDP is expected to grow by 4.8 per cent, Malaysia by 5.3 per cent, the Philippines (6.5 per cent), Singapore (2.5 per cent), Thailand (2.9 per cent) and Vietnam (6.8 per cent).
“Countries with large customer bases are likely to cushion the impact of global trade tensions,” he said, adding that the trade and foreign direct investment outlook for these countries remains positive.
Tanuwidjaja was speaking at UOB Global Economics and Market Research’s 2025 Macroeconomic Outlook Virtual Media Briefing today.
Shift in global supply chain due to tariff threats
He elaborated that the ongoing shift in the global supply chain towards ASEAN, driven by the China Plus One Strategy (C+1), could further accelerate ASEAN-6 economic growth as trade tensions between the United States (US) and China intensify.
Citing Donald Trump’s first term as US President, Tanuwidjaja observed a trend of supply chain rerouting and rebalancing across ASEAN, with Singapore emerging as a key destination.
“Singapore is often the initial landing point for investors before they expand into the broader region. Subsequently, countries like Indonesia, Vietnam, Malaysia and Thailand could be beneficiaries out of Singapore,” he added.
He emphasised that ASEAN will continue to attract quality investments, especially those related to the global diversification strategies in manufacturing and technology, as well as sectors targeting young and rising middle-income class markets with high consumption potential.
“To capitalise on these opportunities, ASEAN economies must prioritise steady structural transformation including human capital enhancement, creating investment-friendly regulations, and attracting investments in emerging sectors,” he said.
Tanuwidjaja also highlighted ASEAN’s untapped potential in consumption markets, as many of these areas are less affected by tariffs dominating high-value and tech sectors, global investments are expected to flow into ASEAN.
Narrowing into segmental beneficiaries, he added that the finance and insurance sector received the highest share of investment, with more than 40 per cent going into the sectors, followed by manufacturing, professional and technical services, retail, transport and storage.
China Overcapacity, Tariff Threats, and ASEAN
When asked about China’s overcapacity issues, compounded by US tariff threats, Tanuwidjaja said the situation remains manageable with potential benefits for smaller ASEAN countries.
“This could lead to instability among local producers; however, the scale is manageable. One solution is to foster partnerships with local firms through joint ventures. Additionally, direct bilateral solutions among ASEAN member states could be pursued,” he suggested.
UOB senior economist (Malaysia) Julia Goh echoed this view, emphasising the importance of mitigating anti-dumping practices and prioritising local value-add to strengthen supply chains and counter protectionist measures.
Regarding ASEAN’s attractiveness for foreign investments under Trump’s “America First” policies, Goh noted that these policies could accelerate supply chain shifts as the US seeks to further decouple from China.
“However, caution is required to address potential secondary sanctions and export controls targeting 'China Plus One' countries. The trajectory will depend on specific policies implemented under a possible Trump 2.0. ASEAN must navigate these measures carefully,” she added.
-- BERNAMA