AMRO: ASEAN+3 ECONOMIES REMAIN POSITIVE, SET TO GROW 4.2 PCT IN 2025 AMID EXTERNAL CHALLENGES

By Nurunnasihah Ahmad Rashid

KUALA LUMPUR, Jan 21 (Bernama) -- ASEAN+3 economies, comprising 10 ASEAN member states, China, Japan and South Korea, are poised for sustained growth in 2025 despite facing external risks, said ASEAN+3 Macroeconomic Research Office (AMRO) chief economist Khor Hoe Ee.

Khor said these external risks include potential tariff escalations and tighter global financial conditions stemming from the United States (US) policy shifts.

He said the region’s growth outlook remains positive, with projections exceeding four per cent, supported by robust domestic consumption, favourable employment conditions, and low inflation.

“Exports, particularly in the technology sector, alongside recovering tourism and the semiconductor industry, further bolster the economic expansion.

“ASEAN+3 economies are well-positioned to manage these uncertainties, thanks to adequate fiscal flexibility and strong regional cooperation frameworks like the Regional Comprehensive Economic Partnership and the Chiang Mai Initiative Multilateralisation,” he told Bernama.

AMRO forecasts the ASEAN+3 region to grow at 4.2 per cent in 2025, according to its latest quarterly update of the ASEAN+3 Regional Economic Outlook (Areo).

The growth is slightly below the 4.4 per cent forecast in the October 2024 Areo update.

He said that despite global headwinds, the region’s pragmatic approach to shared prosperity and its commitment to integration under the ASEAN Community Vision 2045 enhance its resilience to external shocks.

“Geopolitical tensions have also reinforced ASEAN+3’s strategic role in global supply chain restructuring, whereby companies are diversifying production bases, with ASEAN economies emerging as attractive investment destinations due to their robust infrastructure, political stability, and growing domestic markets,” he said.

While a potential resurgence of US inflation and higher interest rates could lead to capital outflows and currency depreciation in the region, Khor highlighted that ASEAN+3 economies are better prepared to respond swiftly and flexibly should risks materialise.

“This provides sufficient policy space for implementing counter-cyclical measures if needed.

“This resilience is attributed to lessons learned during the COVID-19 pandemic when the region effectively implemented structural reforms and digital transformation to stabilise its economies,” he added.

Khor also emphasised the importance of continued regional cooperation to navigate evolving challenges, adding that initiatives promoting supply chain resilience and sustainable finance will ensure long-term economic sustainability.

“The ASEAN+3 region, with its growing middle class and competitive manufacturing capabilities, remains a vital link in global trade, well-equipped to adapt to changing economic dynamics while driving sustainable growth,” he said.

-- BERNAMA