ASEAN, INDIA
Indian outbound tourism to Southeast Asia rises to 3.75 million in 2023
(7 January 2025) Indian outbound tourism to Southeast Asia has surged, with visitor numbers rising from 31,100 in 2021 to 3.75 million in 2023, according to the World Travel and Tourism Council (WTTC). While Indian travel to Sri Lanka and France grew five- and twelve-fold, respectively, during the same period, Southeast Asia saw significantly higher visitor numbers, supported by affordable luxury, convenient visa policies, and expanded flight connections. Spending by Indian travellers abroad reached USD 33 billion in 2023, placing India 10th globally in outbound tourism expenditure. Destinations like Thailand, Indonesia, and Viet Nam attract Indian tourists with competitive pricing compared to Western countries, with direct flights from India increasing 20% in 2024. Southeast Asia also appeals for weddings, with costs often undercutting domestic Indian destinations. Initiatives such as visa-free entry in Thailand and Malaysia and joint ASEAN-India tourism activities further boost travel. Oyo and airlines including Singapore Airlines and VietJet have expanded operations to cater to this market, reflecting growing demand.

THAILAND
Thai government’s plan to reduce electricity prices welcomed by industry leaders
(10 January 2025) The Thai government’s plan to reduce electricity prices from THB 4.15 to THB 3.70 per unit has been welcomed by industry leaders and households as a measure to lower living costs and enhance economic competitiveness. Prime Minister Paetongtarn Shinawatra announced discussions to eliminate unnecessary costs to achieve the price target, initially proposed by former Prime Minister Thaksin Shinawatra. Federation of Thai Industries (FTI) Chairman Kriengkrai Thiennukul highlighted that the reduction would alleviate high production costs compared to regional competitors like Viet Nam and Indonesia, strengthening Thailand’s export and investment appeal. Thai Chamber of Commerce (TCC) Chairman Sanan Angubolkul estimated annual savings of THB 100 billion for households, boosting consumer spending and business profitability. The Electricity Generating Authority of Thailand (EGAT) may require subsidies to support this adjustment, adding to its existing liabilities of over THB 100 billion. At THB 4.15, Thailand’s electricity cost ranks fifth highest in ASEAN, below Singapore (THB 12.30) but above nations like Vietnam (THB 2.69) and Indonesia (THB 2.59).

THAILAND
Inflation rate rises to 1.23% in December 2024, marking return to BOT target range
(6 January 2025) Thailand’s inflation rate rose to 1.23% in December 2024, marking its return to the Bank of Thailand’s (BOT) 1%-3% target range for the first time since May. Core inflation stood at 0.79%, with consumer prices falling 0.18% month-on-month. Full-year inflation averaged 0.4%. The Trade Policy and Strategy Office projects inflation exceeding 1% in Q1 2025 due to higher diesel and food prices, with minimal impact from the recent minimum wage hike. Despite government calls for further rate cuts to boost the economy, BOT maintained its policy rate at 2.25% in December, citing the need for policy space amid global uncertainties. BOT forecasts inflation to average 1.1% in 2025 and economic growth to rise to 2.9% from 2.7% in 2024. Assistant Governor Sakkapop Panyanukul emphasised a robust monetary policy stance to address challenges. The rate panel will next meet on 26 February 2025.

MALAYSIA, SINGAPORE
Johor-Singapore Special Economic Zone (JS-SEZ) signed into law
(8 January 2025) The Johor-Singapore Special Economic Zone (JS-SEZ) agreement, signed during the 11th Malaysia-Singapore Leaders’ Retreat on 7 January, aims to create 20,000 skilled jobs and facilitate the expansion of 50 projects within five years and 100 projects in a decade. The initiative spans the Iskandar Development Region and Pengerang, focusing on 11 sectors, including manufacturing, logistics, and renewable energy. Malaysia will offer tax incentives, a special corporate tax rate, and establish the Invest Malaysia Facilitation Centre – Johor as a one-stop investment hub. Early measures include passport-free QR code clearance at checkpoints and enhanced movement of goods and labour. In 2023, Singapore accounted for 23.2% of Malaysia’s FDI, totalling MYR 43.7 billion, with Johor receiving MYR 31 billion. Singaporean businesses expressed interest, highlighting benefits for logistics, transportation, and manufacturing sectors. Industry leaders called for detailed infrastructure timelines and policy rollouts to maximise benefits. The JS-SEZ is expected to strengthen regional economic integration and attract global investments by leveraging Johor and Singapore’s complementary strengths.

INDONESIA
Indonesia formally joins BRICS as full member, expanding group to 11 nations
(7 January 2025) Indonesia has formally joined BRICS as a full member, expanding the group to include 11 nations. Brazil, which holds the BRICS presidency in 2025, confirmed Indonesia’s entry following unanimous approval by member states, as part of an expansion strategy endorsed at the 2023 Johannesburg summit. Indonesia’s accession was delayed until after its presidential election in 2024, with President Prabowo Subianto assuming office in October. Brazil highlighted Indonesia’s alignment with BRICS goals, including support for global governance reforms and fostering cooperation within the Global South. The group now comprises Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, the United Arab Emirates, and Indonesia.

INDONESIA
Indonesian e-commerce firm Bukalapak announces end of selling physical goods on its marketplace
(8 January 2025) Bukalapak, an Indonesian e-commerce firm, announced it will cease selling physical goods on its marketplace and focus exclusively on virtual products, such as mobile phone credits and streaming vouchers. Customers have until 9 February to place final orders for physical items. The decision follows intense competition from market leaders Shopee, owned by Sea, and Tokopedia, now 75.01% owned by ByteDance’s TikTok. Bukalapak, which raised USD 1.5 billion in its 2021 IPO, has seen its shares decline significantly from an initial IDR 1,060 to IDR 117, a 4.1% drop as of Wednesday. The company reported a loss of IDR 593.23 billion (USD 36.62 million) for the first nine months of 2024. Bukalapak stated its commitment to supporting sellers during the transition to a virtual product-focused platform.

MYANMAR
Military junta implements rolling blackouts in Yangon and Naypyidaw 
(6 January 2025) Myanmar’s military government has implemented rolling blackouts in Yangon and Naypyidaw to manage electricity demand and avoid grid collapse, providing only eight hours of power daily on a rotating schedule starting 5 January. Yangon’s over 40 townships are divided into three groups, each receiving electricity in two four-hour intervals, though actual supply often falls short. The Ministry of Electricity reported a significant gap between the 4,400 MW daily demand and the 1,701 MW produced on 5 January, citing damaged power lines, natural disasters, and low gas quotas. Nationwide electricity production has declined by at least one-third since the 2021 coup, with Yangon alone consuming slightly over half of the national supply. Naypyidaw, previously exempt from power outages, is also experiencing blackouts. The junta leader pledged in January 2023 to achieve sufficient electricity supply by 2025, but challenges persist, including rising costs of solar power equipment, which limits its viability as an alternative energy source.

RCEP Monitor

CHINA
China’s CPI rises 0.1% year-on-year in December 2024, marking fourth consecutive month of deceleration
(9 January 2025) China’s consumer price index (CPI) rose 0.1% year-on-year in December 2024, marking the fourth consecutive month of deceleration and a full-year increase of 0.2%, significantly below the earlier forecast of 1.1%. Core CPI, excluding food and fuel, rose 0.4%, the highest since July, while producer prices declined by 2.3%, continuing 27 months of factory deflation. The National Bureau of Statistics attributed the decline to commodity price fluctuations and seasonal industry slowdowns. The GDP deflator — a broader measure of economy-wide prices — is expected to decline for the seventh consecutive quarter, extending into 2025, marking the longest streak since the 1960s. Government measures to counteract deflation include expanding subsidies for consumer products and industrial equipment upgrades. President Xi Jinping’s administration has prioritised boosting consumption and domestic demand through public spending and monetary easing in 2025. Economists expect prolonged challenges, with the People’s Bank of China likely to pursue further monetary easing, including interest rate cuts and reducing banks’ reserve requirements, to support economic growth while managing yuan depreciation pressures.

HONG KONG
Hang Seng Index declines 0.4%, marking 3.1% weekly drop
(10 January 2025) The Hang Seng Index declined 0.4% to 19,155.66, marking a 3.1% weekly drop, the largest since 15 November, with Hong Kong’s stock market losing USD 118 billion in capitalisation. Key declines included Li Ning (-4.6%), Lenovo Group (-4.1%), and China Life Insurance (-3.9%), while Tencent rose 0.3%. US-China tensions, including blacklisting Chinese firms like Tencent and Contemporary Amperex, contributed to sell-offs. China’s persistent deflation and the central bank’s decision to refrain from further government bond purchases to manage yuan depreciation added to market concerns. Four IPOs launched, with Suzhou Sepax Technologies (+377%) and Juneway Electronic (+268%) performing strongly, while Bloks Group rose 50% and Numans Health Foods dropped 19%. Regional markets also faced declines, with Japan’s Nikkei 225 down 0.9% and Australia’s S&P/ASX 200 falling 0.5%.

AUSTRALIA
Retail sales increases by 0.8% in November 2024, below forecast
(9 January 2025) Australian retail sales increased by 0.8% in November 2024, below the forecasted 1% rise, following a revised 0.5% gain in October, according to the Australian Bureau of Statistics. Sales grew 3% year-on-year, with department stores leading monthly gains at 1.8%, followed by clothing and food at 1.6%, and cafes, restaurants, and takeaways at 1.5%. The data, coupled with weak underlying inflation, has increased market expectations of a Reserve Bank of Australia (RBA) interest rate cut in February, with money markets pricing a 70% likelihood. The RBA’s December minutes indicated cautious optimism on inflation nearing target levels, but uncertainty persists about household spending. Consumer sentiment remains a concern for Prime Minister Anthony Albanese’s government ahead of the May 2025 election, amid high borrowing costs and cost-of-living pressures. The ABS plans to replace retail sales data with a broader household consumption report from mid-2025, with the first release scheduled for Friday.