(Bangkok, 20th) The economic growth of the five main Southeast Asian economies slowed year-on-year in the first quarter, indicating that the economic momentum of Southeast Asia’s main economies had already begun to weaken before the U.S. imposed new tariffs. The impact of tariffs will significantly slow down economic growth in the second half of the year.
Trade-oriented economies like Malaysia, Singapore, and Thailand are starting to prepare for lower-than-expected annual growth, highlighting the looming global uncertainty’s impact on exports and the broader domestic economy, including corporate investment decisions.
The National Economic and Social Development Board of Thailand released data on Monday (May 19th) showing that Thailand's GDP grew by 3.1% year-on-year in the first quarter, lower than the revised 3.3% of the previous quarter but exceeding the expected 2.9%.
Thailand’s first-quarter exports grew by 12.3%, better than the fourth quarter of last year, but government spending and private consumption were weak, dragging down the overall growth rate. High household debt in Thailand affected purchasing power, especially car sales.
According to Nikkei Asia, the other four economies that have released quarterly GDP data also showed a slowdown in growth.
Indonesia, Southeast Asia's largest economy, saw its GDP grow by 4.87% in the first quarter, slower than the 5.02% of the fourth quarter last year, marking the weakest growth since the third quarter of 2021.
Malaysia's economy grew by 4.4% in the first quarter, with preliminary data from Singapore at 3.8% and Vietnam at 6.93%, all lower than the 4.9%, 5%, and 7.55% of the fourth quarter last year, respectively.
The Philippines was an exception, growing by 5.4% in the first quarter, slightly higher than the 5.3% in the fourth quarter of last year, aided by rate cuts and low inflation.
Many Southeast Asian economies rely heavily on exports, and the reciprocal tariffs imposed by U.S. President Trump will weaken these economies’ exports to the U.S., posing challenges to this year's economic growth in these countries.
Economists say that China is the largest trading partner for many Southeast Asian countries, and the U.S.-China trade war may lead to a slowdown in China's economy, putting pressure on Southeast Asia as well.
In a report last Friday (16th), Capital Economics’ Senior Asia Analyst, Leather, mentioned Malaysia’s outlook, saying, "In the short term, businesses will try to ship to the U.S. before electronic tariffs are possibly imposed, which should boost exports. However, as economic growth in China and the U.S. slows, we believe exports will weaken later this year."
Thailand’s Finance Minister, Apisak, told reporters on Monday that Thailand's economy will slow significantly in the third and fourth quarters.
The National Economic and Social Development Board of Thailand stated on Monday that it has downgraded this year's annual economic growth forecast by one percentage point, expecting growth to be only 1.3% to 2.3% this year.
Last month, Singapore also lowered its annual growth expectation from 1% to 3%, by one percentage point. Malaysia's central bank said last Friday that this year’s economic growth rate would be slightly lower than the previously expected 4.5% to 5.5%.
Trade-oriented economies like Malaysia, Singapore, and Thailand are starting to prepare for lower-than-expected annual growth, highlighting the looming global uncertainty’s impact on exports and the broader domestic economy, including corporate investment decisions.
The National Economic and Social Development Board of Thailand released data on Monday (May 19th) showing that Thailand's GDP grew by 3.1% year-on-year in the first quarter, lower than the revised 3.3% of the previous quarter but exceeding the expected 2.9%.
Thailand’s first-quarter exports grew by 12.3%, better than the fourth quarter of last year, but government spending and private consumption were weak, dragging down the overall growth rate. High household debt in Thailand affected purchasing power, especially car sales.
According to Nikkei Asia, the other four economies that have released quarterly GDP data also showed a slowdown in growth.
Indonesia, Southeast Asia's largest economy, saw its GDP grow by 4.87% in the first quarter, slower than the 5.02% of the fourth quarter last year, marking the weakest growth since the third quarter of 2021.
Malaysia's economy grew by 4.4% in the first quarter, with preliminary data from Singapore at 3.8% and Vietnam at 6.93%, all lower than the 4.9%, 5%, and 7.55% of the fourth quarter last year, respectively.
The Philippines was an exception, growing by 5.4% in the first quarter, slightly higher than the 5.3% in the fourth quarter of last year, aided by rate cuts and low inflation.
Many Southeast Asian economies rely heavily on exports, and the reciprocal tariffs imposed by U.S. President Trump will weaken these economies’ exports to the U.S., posing challenges to this year's economic growth in these countries.
Economists say that China is the largest trading partner for many Southeast Asian countries, and the U.S.-China trade war may lead to a slowdown in China's economy, putting pressure on Southeast Asia as well.
In a report last Friday (16th), Capital Economics’ Senior Asia Analyst, Leather, mentioned Malaysia’s outlook, saying, "In the short term, businesses will try to ship to the U.S. before electronic tariffs are possibly imposed, which should boost exports. However, as economic growth in China and the U.S. slows, we believe exports will weaken later this year."
Thailand’s Finance Minister, Apisak, told reporters on Monday that Thailand's economy will slow significantly in the third and fourth quarters.
The National Economic and Social Development Board of Thailand stated on Monday that it has downgraded this year's annual economic growth forecast by one percentage point, expecting growth to be only 1.3% to 2.3% this year.
Last month, Singapore also lowered its annual growth expectation from 1% to 3%, by one percentage point. Malaysia's central bank said last Friday that this year’s economic growth rate would be slightly lower than the previously expected 4.5% to 5.5%.