Ask Australians about their next holiday destination, and many will name an ASEAN nation – maybe Indonesia, Vietnam, Thailand, the Philippines or Singapore. These countries offer vibrant experiences, and are literally on Australia’s doorstep. Yet few of us have these same ASEAN nations in our investment portfolio, and this can mean missing out on opportunities to tap into the growth and diversity these markets offer.
ASEAN (Association of Southeast Asian Nations) is made up of 10 member states – Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. What’s remarkable about many of these nations is the rapid growth they are experiencing.
A recent report by the Organisation for Economic Co-operation and Development (OECD) says ASEAN economies have “shown resilience in the face of global uncertainty”, standing up well to the challenges of the pandemic, the conflict in Ukraine and a global economic slowdown.
The OECD expects ASEAN’s average, real (after inflation) economic growth to reach 4.6% in 2023 and 4.8% in 2024. Vietnam and the Philippines are expected to perform even better, with both forecast to notch up economic growth of 6%-plus through to 2024. For context, the Reserve Bank expects the Australian economy to grow by just 1.2% this year and 1.4% in 2024.
ASEAN growth isn’t expected to slow any time soon. In dollar terms, the combined economic output (GDP) of ASEAN is projected to grow from $US3.6 trillion ($5.5 trillion) in mid-2022 to $US5.6 trillion by 2028. By 2025, the ASEAN bloc is expected to become the world’s fourth-largest economic area.
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