Post-pandemic reopening. Most countries fully reopened their economies from the second quarter of 2022 onwards, prompting a sharp acceleration in household expenditure. Indeed, we expect consumption to exceed pre-pandemic levels for all countries in the bloc by the end of the year. So even if external demand slows, this rebound in domestic private consumption should support growth.
The beginnings of a tourism recovery. Tourism provides many jobs and generates substantial revenue for a number of regional economies. Take Thailand as an example: after two difficult years, Thailand welcomed around 4 million tourists between January and August, with the potential to exceed 10 million (around one-quarter of the 2019 level) by the end of 2022.
Long-term transformation. Alongside near-term recovery, the region’s consumption potential is underpinned by sound fundamentals, accelerating urbanisation and a rising middle class. Though the region accounts for only just under 7% of Asia’s wealth now, the size of the affluent population (with wealth of USD250,000 or more) is expected to more than triple by 2035.
Even as clouds gather over the global economy, we expect ASEAN to keep on sailing through the storm.