ASEAN Economic Forecast

Economic Snapshot for ASEAN

April 18, 2019

ASEAN region expected to maintain solid pace of expansion in 2019

Regional economic growth moderated last year but is expected to maintain a solid pace of expansion this year, underpinned by wage growth, infrastructure spending and foreign investment inflows. However, a prolonged and stronger moderation in China, intensification of the American-Sino trade spat and financial market volatility pose downside risks to the regional economy.

The ASEAN region is expected to grow 4.8% in 2019, unchanged from last month's forecast. In 2020, the region is expected to grow 4.8% again.

Indonesia Economic Outlook

The economy likely grew strongly in the first quarter of the year. Private consumption should have performed well, boosted by low inflation and government fiscal support to low-income families; indeed, retail sales growth was elevated in January and February. Moreover, tourist arrivals were buoyant in the same two months. On the other hand, manufacturing was soft, with the PMI averaging lower in Q1 than in Q4 2018 amid ebbing global growth. External headwinds also partly explain the sharp fall in goods exports in Q1, which led the trade balance to worsen in annual terms despite a notable decline in imports. On the political front, general elections will be held on 17 April. Incumbent Joko Widodo is the bookies’ favorite, whose victory would signal policy continuity and likely see a renewed focus on infrastructure development.

Economic growth will be firm this year, underpinned by strong private consumption and investment. Moreover, the external sector should strengthen as import growth softens after last year’s surge. Potential delays to infrastructure projects, global trade tensions and uncertain momentum in China pose downside risks.

Met the why particular panelists expect GDP growth of 5.1% in 2019, which is unchanged from last month’s forecast. For 2020, panelists see the economy expanding 5.2%.

Thailand Economic Outlook

The outcome of the March general election remains uncertain with both the opposition alliance (PT) and the pro-junta bloc (PP) currently lacking the numbers needed to form coalitions and nominate a prime minister. However, the PP bloc is expected to secure enough seats to form a government after official election results are released on 9 May. Political uncertainty prior to, and after, the general elections is likely leaving its mark on the economy. Private consumption growth moderated noticeably in February while private investment fell in the same month, reflecting dampening domestic demand. Weakening demand in Thailand is also evidenced by the marked drop in imports in February. Manufacturing output, meanwhile, dropped at the steepest rate in over four years in February, while the average manufacturing PMI reading for Q1 suggested only a fractional improvement in operating conditions.

The economy is expected to grow at a more moderate pace this year despite robust public expenditure and fixed investment growth related to infrastructure projects. The ongoing trade spat between the U.S. and China remains a key downside risk to the outlook, while high household indebtedness could drag on household expenditure.

Our panel expects the economy to expand 3.6% in 2019, which is unchanged from last month’s forecast, and 3.6% again in 2020.

Vietnam Economic Outlook

The economy lost some ground in the first quarter of the year, weighed on by slower growth across all sectors. Most notable was the slowdown in service sector activity, which was likely hindered by fewer tourist arrivals in the quarter, while the agricultural sector also weakened. Moreover, merchandise export growth dipped in Q1, partly due to falling smartphone shipments. On a brighter note, the industrial sector held up well, while FDI remained robust, with newly established businesses increasing at the fastest rate in five years; this could be connected to firms shifting production out of China amid the prolonged U.S.-China trade dispute.

The outlook for 2019 remains favorable. Household spending will remain brisk amid stable inflation and rising incomes, while sustained tourism should support the service sector. Moreover, industrial output, FDI and exports should continue to power growth. Risks from a larger-than-expected Chinese or global slowdown loom over the outlook, however.

Met the why particular panelists project the economy expanding 6.6% in 2019, which is unchanged from last month’s forecast, and 6.4% in 2020.

ASEAN Monetary & Financial Sector News

Inflation was stable at February’s 1.9% in March. The result reflected moderating inflationary pressures in Indonesia and the Philippines offsetting a pick-up in inflation in Vietnam and noticeably higher prices in Thailand. Looking ahead, regional inflation is expected to remain broadly stable this year on robust economic growth, rising waged and elevated food prices.

Monetary policy action was muted in recent weeks amid manageable inflationary pressures. In the face of a more challenging external environment, combined with underwhelming inflation in most countries and the U.S. Fed’s more dovish stance, monetary policy in the region is expected to remain largely steady this year.

Last year, most regional currencies lost ground against the greenback. This was likely linked to the U.S. Federal Reserve’s rate hikes and a more uncertain global environment. This year, the currencies are expected to remain fairly stable due to a more dovish Fed. However, financial-market turbulence and investor mood swings could drag on the currencies.

See the full Met the why particular Consensus Forecast ASEAN report

Sample Report

5 years of ASEAN economic forecasts for more than 30 economic indicators.


Sample Report

Get a sample report showing our regional, country and commodities data and analysis.


Request a Trial

Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.

Sign Up

ASEAN Economic News

Search form