Southeast Asian Economies Show Divergent Growth Through 2035

The six largest economies in Southeast Asia are projected to grow by an average of 4.8 percent annually from 2026 through 2035. According to a report by Bain & Company, DBS Bank, and Vriens & Partners, this long-term growth is driven by technology adoption, industrialization, infrastructure development, and sustained foreign investment.

Recent data from McKinsey & Company reveals a widening gap in current performance. Vietnam and Malaysia are gaining momentum through electronics and electrical exports, with Vietnam recording 8.39 percent growth and Malaysia 6 percent in the second quarter. Singapore also saw 5.9 percent growth, with artificial intelligence demand accelerating its manufacturing sector to 12.5 percent.

In contrast, Thailand and the Philippines are experiencing slower growth due to weak domestic demand. Thailand's growth slowed to 1.9 percent, while the Philippines reached its slowest pace since 2021 at 2.3 percent. Both nations, along with Indonesia, are identified as having higher exposure to downside risks related to institutional strength and energy security.

Rising energy costs have accelerated inflation across five of the six economies. In response, Indonesia and the Philippines tightened monetary policy, and Singapore adjusted its exchange-rate policy, while Malaysia, Thailand, and Vietnam maintained their existing settings.