“ASEAN-6’s GDP Growth in Q2 2024: Is Vietnam’s 6.9% Enough for the Top Spot?”

Southeast Asian economies are showing positive signs of recovery in the second quarter of 2024, with Vietnam leading the pack.

Indonesia

Indonesia’s GDP grew by 5.05% year-on-year in Q2 2024, slightly lower than the 5.11% growth in Q1 2024, according to official data from Indonesia’s Statistics Agency.

The Central Bank of Indonesia attributed the growth to increased household consumption and investment. Family consumption, which accounts for half of Indonesia’s economy, rose by 4.93% due to growth in the transportation and hotel industries.

Meanwhile, exports increased by 8.28% year-on-year, driven by a rise in foreign tourist arrivals.

For the remaining quarters of the year, the Central Bank of Indonesia previously forecasted that economic growth would be supported by increased fiscal stimulus and stronger exports.

“Indonesia is expected to maintain solid domestic growth, targeting a GDP growth rate of 5% for the full year 2024,” said Hosianna Situmorang, an economist at Danamon Bank. She added, “With expectations of global interest rate cuts, especially a more dovish Fed, Indonesia’s economic outlook for 2025 looks promising.”

Philippines

The Philippines’ economy expanded by 6.3% in Q2 2024, according to the latest data released by the Philippine Statistics Authority, as the government ramped up spending.

The report showed that government spending in Q2 2024 rose by 10.7% due to infrastructure projects, defense equipment upgrades, and preparations for the upcoming mid-term elections in 2025. In contrast, household spending, which accounts for 70-80% of the country’s GDP, grew by only 4.6% year-on-year.

Socio-Economic Planning Minister Arsenio Balisacan noted that while the GDP growth rate was the highest in the last five quarters, household spending during this period “did not grow as strongly as expected” as consumers felt the impact of higher interest rates and inflation.

Vietnam

Vietnam’s GDP grew by an estimated 6.93% year-on-year in Q2 2024, according to the latest report from the General Statistics Office. This growth rate is only slightly lower than the 7.99% expansion recorded in Q2 2022 during the 2020-2024 period.

The agriculture, forestry, and fisheries sector grew by 3.34%, contributing 5.36% to the overall increase in the economy. The industry and construction sector expanded by 8.29%, contributing 45.73%, while the services sector grew by 7.06%, contributing 48.91%.

Malaysia

Malaysia’s GDP grew by 5.9% year-on-year in Q2 2024, the strongest growth since Q4 2022, according to data from Bank Negara Malaysia. Private consumption remained robust in Q2, supported by the continued recovery in the labor market and a further increase in tourist arrivals.

The economy also benefited from the spillover effects of the global technology cycle. Tourism activities rebounded strongly, with the services sector growing by 5.9% in Q2.

As Malaysia continues to benefit from the relocation of global supply chains, exports increased by 8.4% in Q2, up from 5.2% in Q1. The manufacturing sector grew at a rate of 4.7%.

Thailand

Thailand’s GDP, the second-largest economy in Southeast Asia, grew by 2.3% year-on-year in Q2 2024, according to data from the National Economic and Social Development Council (NESDC). This growth was attributed to increased consumption, tourism, and exports.

NESDC currently projects Thailand’s GDP growth for 2024 to be in the range of 2.3-2.8%. However, they noted that Thailand’s economy lags behind regional peers due to high household debt and borrowing costs, as well as sluggish exports amid a slowdown in China, Thailand’s top trading partner.

Singapore

Singapore’s GDP grew by 2.9% year-on-year in Q2 2024, slightly lower than the 3% growth in Q1 2024, according to advance estimates released by the Ministry of Trade and Industry (MTI) on July 12.

The expansion was supported by a recovery in the manufacturing sector, which grew by 0.5% in Q2 after contracting by 1.7% in Q1. The construction sector and goods-producing industries also recorded growth rates of 4.3% and 1.3%, respectively.

In Q1 2024, the Philippines led the ASEAN-6 group with a GDP growth rate of 5.7%. Vietnam followed closely with a growth rate of 5.66%, placing it second among the ASEAN-6 economies.

Indonesia came in third with a GDP growth rate of 5.11% in Q1 2024, followed by Malaysia at 4.2%. Singapore and Thailand trailed with growth rates of 2.7% and 1.5%, respectively.

In Q2 2024, Vietnam overtook the Philippines as the fastest-growing economy in the region, with a GDP growth rate of 6.93%. The Philippines posted a growth rate of 6.3%, followed by Malaysia at 5.9%.

Indonesia’s GDP grew by 5.05% in Q2, followed by Singapore and Thailand with growth rates of 2.9% and 2.3%, respectively.