- Bernama
PETALING JAYA: Asean’s economy is demonstrating a robust resilience in the face of global trade turbulence, with strong third quarter (3Q25) data underscoring the region’s ability to defy tariff headwinds while riding powerful structural tailwinds from the artificial intelligence investment cycle, says Maybank Investment Bank Research (Maybank IB Research).
This comes as fresh gross domestic product (GDP) data beat forecasts across key markets, led by Vietnam, Malaysia, and Singapore, suggesting that the region’s growth story remains intact despite US tariffs.
In a note to clients yesterday, the research house said that the region had “held up well in the third quarter, despite higher US reciprocal tariffs which were effective Aug 7”.
It said that Vietnam grew 8.2% year-on-year (y-o-y), Malaysia 5.2%, and Singapore likely closer to 4%, once revised against the advance estimate of 2.9%.
This growth momentum reflects a distinctive economic composition, where electronics-heavy value chains, surging foreign direct investment inflows, and a broad-based uplift from artificial intelligence-focused capital expenditure cycles have supported near-term stability and strengthened medium-term prospects.
The outsized influence of capital spending related to artificial intelligence (AI) has been a pivotal driver of economic dynamism.
The research house quoted US Federal Reserve chair Jerome Powell as saying: “AI investments in data centres and chips are also a major source of economic growth. This is different from the dotcom era in the sense that these companies, the companies that are so highly valued, actually have earnings.”
The research house pointed out that the surge in demand for semiconductors and related components has translated directly into export gains for a number of Asean economies, with Malaysia’s electrical and electronic exports also expanding at a robust 23.5% in 3Q25, supported by integrated circuits and electrical apparatus.
More notably, the research house said that Malaysia has emerged as a key beneficiary of development, both as a design and fabrication hub and as a destination for hyperscale computing infrastructure investments.
It said, with US technology majors expanding data centre footprints in South-East Asia, Johor in particular has experienced rapid capacity growth, overtaking several regional peers in terms of pipeline development.
The research house reported that foreign-investment approvals in Malaysia hit RM106.8bill in the first half of this year, led by services and manufacturing, with electronics accounting for nearly one-fifth of all approved manufacturing investments.
Furthermore, the report emphasised that Malaysia’s 3Q25 GDP acceleration was supported not only by consumption and construction but also a rebound in external trade, illustrating a balanced and broad-based growth profile.
Across Asean, it said policymakers have complemented trade and investment tailwinds with supportive monetary and fiscal stances, as central banks in Indonesia, Thailand, and the Philippines continued to ease policy rates, while targeted stimulus in Indonesia and infrastructure-driven state spending in Vietnam provided further support.
In Singapore, consumer-oriented transfers helped underpin retail demand, even as capital formation accelerated. The policy reflects a region actively calibrating to global macro volatility without compromising long-term competitiveness.
Looking ahead, Maybank IB Research emphasised five thematic pillars underpinning Asean’s prospects moving into next year: accelerating AI capital expenditure, sustained strength in manufacturing and logistics, rising FDI linked to supply chain diversification, accommodative policy, and a modest tourism recovery.
It also highlighted that structural diversification away from China remains evident, with multinationals continuing to expand production bases into Vietnam, Malaysia, and Thailand.
While Indonesia and the Philippines recorded weaker FDI disbursements in the period, it pointed out that the broader narrative points to deepening investor interest in South-East Asia as a neutral and stable production corridor amid global geopolitical realignments.
The research house also said that tourism, though uneven, is gradually normalising, with Chinese arrivals into Malaysia and Vietnam having exceeded pre-lockdown levels, contrasting with Thailand’s weaker numbers due to lingering safety perceptions and currency strength.
It said this rebalancing in tourism suggests shifting consumer preferences and a recalibration of travel competitiveness across Asean destinations.
The research house acknowledged that the overarching narrative is one of strategic resilience, as tariff friction has not precipitated sharp export retrenchment, partly due to carve-outs for key electronics segments, and partly due to limited evidence of inventory frontloading in the United States.
At the same time, the region is benefitting from a secular technology investment cycle that has solidified its relevance within global supply chains.
In a landscape shaped by geopolitical uncertainty and divergent growth paths, it said Asean’s combination of AI-aligned industrial upgrading, diversified export bases, supportive macro policy, and sustained investor interest positions it as one of the most durable growth engines in the global economy.
Malaysia’s strong quarter reinforces this narrative, underlining its strategic role within the regional semiconductor and digital infrastructure ecosystem and augmenting the broader Asean success story.
