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Doha: Qatar National Bank (QNB) ruled out the possibility of growth forecasts for ASEAN-6 economies being impacted by a global trade downturn scenario.
This resilience stems from strong growth momentum, the ability of these countries to avoid or contain tariff-related threats, and benefits arising from changes in trade and investment flow trends.
In its weekly report, QNB emphasized that the six major ASEAN economies: Indonesia, Thailand, Singapore, Malaysia, Vietnam, and the Philippines, have been among the fastest-growing economies globally over recent decades, driven by their effective integration into global markets through international trade.
It also warned, however, that any disruption to trade flows could significantly affect these economies.
The report highlighted trade wars as a prominent global issue, referencing former U.S. President Donald Trumps policy of economic self-reliance, which viewed imports as a depletion of national wealth.
Initial trade disputes began with direct U.S. threats of imposing a 25% tariff on Canada and Mexico, as well as a 10% tariff on China.
These threats were followed by warnings of “comprehensive” and “reciprocal” tariffs on all countries and products, along with targeted tariffs on steel and aluminum imports. In response, other nations evaluated their reactions, escalating the risk of protectionism and trade wars.
QNB analyzed three key factors supporting its view. First, it is unlikely that ASEAN-6 countries will be directly targeted by Trumps tariffs in the near term.
Among the group, Vietnam and Thailand recorded the largest bilateral trade surpluses last year, amounting to $125 billion and $35 billion respectively.
However, these surpluses attract less attention compared to those of key U.S. trade partners like China ($300 billion) and Mexico ($172 billion).
Additionally, ASEAN-6 countries serve as a counterbalance to Chinese influence in the region, positioning them favorably in trade negotiations and reducing potential tariff threats.
The second factor suggests that exporters in ASEAN nations competing with Chinese producers could benefit from higher U.S. tariffs on China, making ASEAN products relatively cheaper in the U.S. market.
Companies in these countries indirectly act as intermediaries for Chinese products entering the U.S. to circumvent tariffs. Moreover, ASEAN economies are benefiting from investments by global companies, including Chinese firms, which are increasingly focusing on establishing production facilities outside China.
The report also noted a gradual shift among Western companies toward a “China-plus-one” strategy to reduce reliance on China and mitigate risks associated with geopolitical tensions. As a result, ASEAN-6 countries are likely to gain from the redirection of trade and investment flows away from China.
Third, the report found that the deterioration in global trade prospects has not significantly affected the growth outlook for ASEAN-6 economies, which maintain high levels of trade integration.
Real GDP growth forecasts for 2025 remain unchanged or have improved compared to the previous year.
QNB pointed out that, following inflation control, central banks in the region have been reducing interest rates, with some achieving “neutral” rate levels that neither constrain nor overly stimulate economic activity.
Many ASEAN-6 governments are pursuing ambitious infrastructure projects and capital expenditure programs aimed at attracting private investments and boosting economic growth.
These large-scale projects are expected to target sectors such as transportation, logistics, mining, and utilities necessary to support new manufacturing facilities.
The report concluded that despite variations in influencing factors across individual ASEAN-6 nations, the region’s overall growth momentum is expected to remain strong through 2025.
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