Kuala Lumpur: 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.
According to BERNAMA News Agency, Khor stated that these external risks include potential tariff escalations and tighter global financial conditions stemming from United States policy shifts. He mentioned that the region's growth outlook remains positive, with projections exceeding four percent, supported by robust domestic consumption, favorable 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.
AMRO forecasts the ASEAN+3 region to grow at 4.2 percent in 2025, according to its latest quarterly update of the ASEAN+3 Regional Economic Outlook (AREO). The growth is slightly below the 4.4 percent forecast in the October 2024 AREO update.
Khor noted 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, with companies diversifying production bases and ASEAN economies emerging as attractive investment destinations due to their robust infrastructure, political stability, and growing domestic markets.
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 materialize. 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 stabilize its economies. Khor also emphasized 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.