Since the Asian Currencies are expected to fall in value on the back of that, it definitely will lead the central banks to raise rates. Of course, central banks in Malaysia, Indonesia, Thailand and Philippines followed suit after the Federal Reserve raised interest rates by 75 basis points in September.
However, it was found that there are some countries in Southeast Asia whose economies are safe from the threat of stagflation and recession that are haunting the world. Do you wonder what the ASEAN countries that are expected to survive in the 2023 recession? If so, you can dive into our post to find out the information about it. Here you go!
Here Are the ASEAN Countries That Will Survive the 2023 Recession!
As we know, the International Monetary Fund (IMF) has warned of the fall of some countries on the verge of recession. The IMF definitely estimates that the world economy will be growing only 3.2% this year and will slow to 2.9% in 2023.
However, the Asian Development Bank (ADB) views developing countries in Asia really continuing to recover despite the risk of a slowdown. Some Southeast Asian countries are actually expected to experience positive growth this year and next year.
Reportedly, there are five Southeast Asian countries that are expected to survive in the 2023 recession. Here are they:
1) Malaysia
According to ADB, Malaysia is expected to decline from 5.4% to 4.7% next year. However, this growth is better than Singapore and Brunei Darussalam if we view it from a regional perspective where they are expected to grow by 3% and 3.6% respectively in 2023. In this case, the global economic slowdown is the reason for this cut.
On the other hand, the Asian Development Bank (ADB) also estimates that India, Maldives, Georgia and Uzbekistan will continue to experience growth of more than 5% next year. The Indian economy is expected to grow 7.2% in 2023, even though it will suffer from high inflation.
Meanwhile, China, which is the second largest economy in the world, is also expected to experience low growth next year. The Asian Development Bank (ADB) has determined a 4.5% growth forecast for China in 2023. The inflation is expected to increase next year because of rising food prices.
2) Indonesia
In 2023, the Indonesia economy is expected to grow by 5%, down from the previous projection of 5.2%. Of course, this is in line with uncertain external conditions. According to ADB, this condition could affect Indonesia’s export performance. ABD predicts that Indonesia’s economic recovery is still on track.
3) Cambodia
The Asian Development Bank (ADB) kept its economic growth forecast for Cambodia at 5.3% in 2022, but it lowered its forecast for 2023 to 6.2% from 6.5% because of weaker global growth.
Despite the cuts, the economic growth in Cambodia will remain high next year. This country’s economy is supported by strong manufacturing performance, from apparel to footwear production, even though the economic slowdown in the United States. Before falling to 8.6% in 2023 because of weaker external demand, industrial production is expected to grow 9.1% this year.
4) Filipino
In 2023, the Philippines is estimated to record 6.3% growth. According to ADB, the economic recovery is expected to take hold this year and next, supported by the strengthening of investment and domestic consumption.
In the Philippines, the economic recovery is affected by factors such as the downward trend in Covid-19 cases and the easing of public mobility.
5) Vietnam
According to ADB, the economic growth in Vietnam will be growing by 6.7% next year. In its latest September release, ADB revealed that Vietnam’s economy is performing quite well amid the global economic uncertainty.
ADB reported restored global food supply chains that will increase agricultural production this year, but high input costs will continue to hinder the recovery of the agricultural sector. In addition, the weakening global demand definitely slowed Vietnam’s production. ADB also revealed that the outlook for the sector remains bullish given the strong FDI in the sector.
Are There Recession-Resistant Industries in Southeast Asia?
According to economists, there are three recession-resistant industries in Southeast Asia. Of course, they suggested that one of the best ways for people who are impacted by job losses to overcome is by making a career change to this recession-resistant situation. Here are they:
1) Healthcare
In the technology and innovation startup landscape, Healthcare is the fastest-growing vertical that covers any product or service which can be delivered or consumed outside a hospital or physician office. Aside from that, it also includes hospital and practice management software.
With many of the region’s startups at the forefront of this surge in internet-based healthcare services, the technology in the healthcare sector is rapidly increasing in Southeast Asia. Reportedly, Singapore and Indonesia are now leading the ASEAN region in healthcare, because of their increasingly tech-savvy populations and the quick pace of technology innovation.
2) Edtech
Because of the lockdowns and reduced capacity of indoor classrooms during the pandemic of Covid-19, a lot of educational institutions and businesses were forced to embrace new ways of providing learning and educational programmes that increased edtech’s appeal.
Of course, ASEAN countries offer the high potential for edtech companies and startups because of the relatively young population in a lot of countries who are open to embracing the digital resources at their disposal.
3) Cybersecurity
For every startup, cybersecurity is a basic need to protect the company from cyber threats. According to The World Economic Forum Global Risks 2015, cyber attacks were ranked alongside unemployment and climate change as one of the top, most significant long-term risks worldwide.
Fortinet’s recent regional survey revealed from the’2022 Cybersecurity Skills Gap Report’ that collected opinions from 110 corporate-level employees in Thailand, Singapore, Malaysia, Philippines, Hong Kong and Indonesia, approximately 72% of the organizations experienced more than one security incident and about 41% stated that security breaches cost them more than USD $1 million. However, this technological section also suffers from a severe lack of skills.
Okay, those are three recession-resistant industries in Southeast Asia that survived the 2023 recession.
A bookworm and researcher especially related to law and citizenship education. I spend time every day in front of the internet and the campus library.
