Containers at Gemalink deep-sea port in Ba Ria-Vung Tau province.

In its January update, AMRO estimated ASEAN 3 growth for 2023 at 4.3%, down from the 4.6 growth in the previous projection. The region’s growth in 2022 was also revised down from 3.7% to 3.3%. The downward projection is mainly due to the continuing weakness of Plus-3 economies, especially China, where growth has become much weaker.

China’s 2022 growth was estimated at 3% and is forecast to grow by 5% in 2023 (down from the 5.3% in October projection).

Vietnam’s economy meanwhile was projected to expand 8% in 2022.

The 2023 growth outlook for ASEAN is forecast down from 4.9% to 4.8%, a slowdown compared to the 5.6% growth of 2022.

According to AMRO, the drag on economic activity from aggressive monetary policy tightening in the United States and the Eurozone will be felt more fully this year, translating to softer export orders for the ASEAN+3.

However, the ongoing resumption of tourism — especially with the return of Chinese tourists — will provide a much-needed boost to growth.

With recession risks still haunting the United States and Europe, China’s economic reopening cannot come at a better time for the region,” said AMRO Chief Economist Hoe Ee Khor. “China’s stronger economy will support regional activity while the border reopening will boost intraregional tourism.”

China’s economy is expected to rebound strongly, reflecting the removal of containment measures and reopening of its economy.

Inflation is moderating across ASEAN+3, tempered by sustained policy tightening by central banks and easing global supply chain bottlenecks. Oil prices have reverted to almost pre-pandemic levels, reflecting weaker global demand. Prices of key agricultural commodities - although remaining relatively high due to the prolonged war in Ukraine - have fallen from their 2022 peaks.

Vietnam’s inflation is predicted to come in at 3% in 2023 (down from 3.2% in the previous forecast). Inflation for the ASEAN+3 region was revised down from 6.3% in 2022 to 4.5% in 2023, and for ASEAN at 5.4% in 2023 from 7.7% in 2022./.