A report by QNB Group predicted that economic growth in ASEAN-6 countries would slow from pre-pandemic averages due to rising interest rates, slowing international trade growth, and challenges in fiscal consolidation across Southeast Asian nations.
The ASEAN-6 refers to Indonesia, Thailand, Singapore, Malaysia, Vietnam and the Philippines.
According to IMF estimates, ASEAN-6 countries are generally paring back financial stimulus this year. Malaysia's government expenditure is forecast to decline 7% in real terms in 2022.
Vietnam remains the exception, according to the report, as strong GDP growth will allow the country to reduce its debt-to-GDP ratio even with increased real spending.
Excluding Vietnam, fiscal policy across ASEAN-6 will provide less support for growth and contribute to weaker performance in 2023, as countries work to rein in debt and spending. Rising interest rates and global trade headwinds are also expected to drag on the regional recovery from the pandemic.
