#Singapore #Economic Forecast #ASEAN #AMRO

ASEAN+3 Economic Outlook: 2026 Predictions

The ASEAN+3 region, which includes the 10 members of the Association of Southeast Asian Nations (ASEAN) alongside China, Japan, and Korea, is expected to show resilient economic growth in the coming years. According to the latest quarterly update from the ASEAN+3 Macroeconomic Research Office (AMRO), the economy experienced a robust growth rate of 4.3% in 2025. However, projections suggest that this growth will moderate slightly to 4.0% in 2026, indicating a steady yet cautious economic landscape amid persistent global uncertainties.

Key Economic Indicators

The recent report highlights an upward revision of growth figures by 0.2 percentage points for both 2025 and 2026, compared to previous updates.

• - Growth Rate: The expected growth rate for 2026 is 4.0%, following a strong 4.3% growth in 2025.
• - Inflation Rates: Inflation is estimated to be around 0.9% for 2025, with an increase projected to 1.2% in 2026, remaining below the long-term average in the region.

Drivers of Growth

The solid economic performance is attributed to several factors:
1. Resilient Technology Exports: There has been continuous demand for technology exports, especially in sectors like advanced electronics and electric vehicles, which contributed significantly to the region's growth.
2. Strong Foreign Direct Investment (FDI): The ASEAN region has attracted substantial FDI, particularly in cutting-edge industries such as digital services, which have bolstered economic activities.
3. Macroeconomic Policies: Supportive macroeconomic policies have enabled stable investment environments, fostering growth across various sectors.

Navigating Global Uncertainties

Despite the positive outlook, challenges loom, particularly concerning external trade policies. AMRO's Chief Economist, Dong He, pointed out that while the ASEAN+3 region has shown resilience in managing global uncertainties, several risks could impact future growth.

• - US Trade Policy: The unpredictability of US trade policy poses a significant risk, with potential extensions and expansions of protectionist measures that could affect regional exports.
• - Technology Demand: A possible decline in technology demand, whether due to market adjustments or slow adoption of artificial intelligence, could influence economic performance. Given the region's deep integration in technology supply chains, such downturns could have widespread effects.
• - Financial Market Volatility: Heightened volatility in global financial markets and slower growth in major economies also present concerns that could hinder economic stability.

Future Considerations

Looking ahead, Dr. He emphasized the importance of maintaining policy readiness to swiftly address any emerging shocks. Keeping a diversified growth approach and enhancing regional economic integration will be crucial for strengthening the region's resilience against potential headwinds.

The full findings and in-depth thematic analysis will be detailed in the flagship report set to release in April 2026, providing comprehensive insights into the economic trajectory of the ASEAN+3 region.

In summary, while the forecast for 2026 indicates steady growth, ongoing vigilance and strategic policy measures will be essential in navigating the complexities of an uncertain global economic landscape.