The ASEAN+3 region, comprising the 10 ASEAN member states and three East Asian economies (China, Japan, and South Korea), is projected to grow at 4.2% in 2025, according to the latest quarterly update from the ASEAN+3 Macroeconomic Research Office (AMRO). Despite escalating trade tensions and external risks, the region’s resilience is underpinned by robust domestic demand, recovering exports, and strong regional cooperation frameworks.
Key Drivers of Growth
- Domestic Demand and Employment:
Strong domestic consumption, favorable employment conditions, and low inflation are expected to sustain growth across the region. Retail sales and private consumption have been bolstered by the recovery in tourism and improving labor markets. - Export Recovery:
The global tech upcycle and recovering semiconductor industry have significantly boosted export performance. Exports, particularly in the technology sector, are expected to remain a key growth driver, despite potential headwinds from rising trade tensions. - Tourism Revival:
The tourism sector, a critical component of many ASEAN economies, is nearing pre-pandemic levels. Favorable visa policies and the return of Chinese tourists have contributed to this recovery.
Challenges and Risks
- Escalating Trade Tensions:
The imposition of higher U.S. tariffs on China in the latter half of 2025 is expected to weigh heavily on the Plus-3 economies (China, Japan, and South Korea), which are projected to grow at 4.0%. ASEAN economies, however, are expected to be less affected, with growth projected at 4.8%. - Global Financial Conditions:
Tighter U.S. monetary policy and higher interest rates could lead to capital outflows and currency depreciation in the region. This divergence in interest rate paths between the U.S. and ASEAN+3 economies may complicate monetary policy decisions. - Inflation Risks:
While inflation in the region is expected to remain contained at 2.1% (excluding Lao PDR and Myanmar), potential spikes in global commodity prices and adverse weather conditions pose risks to price stability.
Regional Cooperation and Resilience
The ASEAN+3 region’s ability to navigate these challenges is bolstered by strong regional cooperation frameworks, such as the Regional Comprehensive Economic Partnership (RCEP) and the Chiang Mai Initiative Multilateralisation (CMIM). These initiatives enhance the region’s resilience to external shocks and provide a platform for collective action.
Additionally, the region’s pragmatic approach to shared prosperity and its commitment to integration under the ASEAN Community Vision 2045 further strengthen its ability to adapt to global economic shifts.
Economic Outlook by Sub-Region
- ASEAN Economies: Projected to grow at 4.8%, driven by robust domestic demand and favorable investment conditions.
- Plus-3 Economies: Expected to grow at 4.0%, with China facing the brunt of U.S. tariff escalations.
A Resilient Region Amid Uncertainty
The ASEAN+3 region remains a bright spot in the global economy, contributing over 40% of global growth. While external risks such as trade tensions and tighter financial conditions pose challenges, the region’s strong fundamentals and commitment to cooperation ensure its continued resilience and growth.
For more detailed insights, you can explore the full ASEAN+3 Regional Economic Outlook (AREO) report on AMRO’s official website.
