However, the experts also noted that the economies of ASEAN countries still face “persistent risks” while the region needs to make efforts for sustainable growth.
In the ADB report titled “Post COVID-19 Economic Recovery in Southeast Asia”, this financial institution has made a positive comment on the strong resilience of ASEAN economies in the coming time. The report also examined growth opportunities, sectoral strategies and priority reforms that can help ASEAN countries boost their medium-term economic recovery.
Before the ADB made the above assessment, the forecasts of other financial institutions were also optimistic about the growth prospects of the ASEAN economies. The International Monetary Fund (IMF) has recently forecast that the ASEAN countries with GDP growth in 2022 are Vietnam (7.2 percent), the Philippines (6.5 percent), and Malaysia and Cambodia (6 percent). Meanwhile, according to a forecast by May Bank (Malaysia), the 2022 GDP of ASEAN-5 group (including Indonesia, Malaysia, Thailand, Vietnam and the Philippines) is expected to rise by 5.6 percent. If this forecast becomes a reality, ASEAN's GDP growth could match China's GDP growth in 2022, which has been forecast at 5 percent, for the first time since 1990.
However, analysts also said the road to recovery for ASEAN economies still has many difficulties. Ramesh Subramaniam, Director General of ADB's Southeast Asia Regional Department, emphasised the risks for the recovery prospects in the region including negative impacts from the conflict in Ukraine causing oil prices to skyrocket as well as the emergence of SARS-CoV-2 virus variants leading to unpredictable developments in the COVID-19 pandemic, disrupting supply chains and production, reducing confidence of businesses and limiting productivity growth. Subramaniam also recommended that in order to create a driving force for sustainable economic growth, the Southeast Asian governments should make sector-specific interventions as well as encourage an enabling business environment, improved infrastructure and stronger intra-regional linkages.
In the recent report, ADB experts also emphasised that the COVID-19 pandemic has created new challenges for the tourism industry. Therefore, to revive this "smokeless industry", Southeast Asian countries should promote tourism demand through strong marketing campaigns, with safer travel standards, more diversified tourism offerings, and better paid and more skilled workers. In addition, the countries need to focus on the development of e-commerce, a sector with strong growth potential in Southeast Asia. It is also essential to raise the dynamism of the electronics industry by developing industry‑specific supportive policies such as smoother coordination between local business, international firms, and governments.
Removing bottlenecks and identifying priorities to ensure a strong and sustainable economic recovery in the region in the coming time has become a top concern in Southeast Asian countries in recent times. At the recent 26th ASEAN Finance Ministers' Meeting hosted by Cambodia, the participants outlined three action priorities of ASEAN: economic recovery, flexible adaptation, and coherence. As the rotating chair of ASEAN 2022, Cambodia affirmed the country will pay close attention to enhancing cooperation among ASEAN member countries to strengthen trade and investment promotion, support ASEAN financial integration with partners, promote the implementation of cross-border payment systems in the region and boost sustainable financial support to mobilise more resources for economic recovery.
The regional and world economies have just experienced a crisis due to the COVID-19 pandemic. In the context of China's economy facing many difficulties because it has not been able to give up the "zero COVID” policy, the European economy reeling due to the conflict in Ukraine and inflation growing increasing high in the US and many other countries, the close cooperation among ASEAN countries to create a driving force for a sustainable growth of the region’s economy is very important.
ASEAn region with a dynamic and sustainable economy not only contributes to the overall growth of the global economy but also helps the bloc maintain its "central role" in multilateral cooperation mechanisms in the Indo-Pacific region.