Captures has widened its scope to include news related to all the members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. Besides the ASEAN Member States, this includes Australia, New Zealand, China, Japan, and South Korea. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

THAILAND
Economy grows 2.8% year-on-year in Q1 2026, beating forecasts
(18 May 2026) Thailand’s economy grew 2.8% year on year in Q1 2026, accelerating from 2.5% in the previous quarter and exceeding a 2.2% Reuters poll forecast, according to the National Economic and Social Development Council (NESDC). Growth was supported by stronger investment, goods exports, and government consumption expenditure. Goods exports rose 15.5% year on year in Q1, compared with 8.7% growth in Q4 2025, with NESDC identifying high-tech electronic exports as a key growth driver. Thailand’s performance contrasted with weaker regional momentum, with the Philippines recording 2.8% growth, its weakest in five years, while growth in Vietnam, Malaysia, and Singapore slowed from the previous quarter despite remaining relatively resilient at 7.8%, 5.4%, and a preliminary 4.6%, respectively. Indonesia’s growth increased to 5.6% from 5.4%, supported by higher government spending. Thailand’s tourism sector was affected by the Iran conflict, with foreign visitor arrivals falling 2.4% year on year in Q1 to 9.3 million due to air transport disruptions and higher ticket prices. Analysts said prolonged Middle East tensions could raise energy and living costs and weaken consumption. Thailand’s consumer prices, which had declined for 12 consecutive months until March, increased 2.9% year on year in April due to higher fuel prices. The NESDC said damage to Middle East oil infrastructure could keep oil prices elevated for several years, weighing on Thai and global economic activity. Earlier this month, the Thai government issued an emergency decree to borrow THB 400 billion to address rising living costs, subsidise vulnerable groups, and support SMEs with liquidity measures to prevent bankruptcies. The NESDC maintained its 2026 growth forecast range at 1.5% to 2.5%.

THAILAND
Government plans to slash more than 7,000 business regulations to lure foreign investments
(18 May 2026) Prime Minister Anutin Charnvirakul’s government plans to reform more than 7,000 business regulations to reduce bureaucratic barriers and accelerate investment as Thailand competes for global capital and supply chain relocations. The initiative, outlined in a government statement on Monday, includes the rollback of ministerial rules and secondary regulations that authorities said have become a significant cost burden on businesses. A government spokesperson said the reforms reflect a shift from a control-oriented bureaucracy towards a more facilitative policy approach. The government also proposed a “Super License” system to consolidate multiple permits into a single approval process. Industry groups have been asked to identify 10 to 20 major regulatory obstacles, with submissions due in early June. The reforms come amid concerns Thailand could lose competitiveness to regional peers, including Viet Nam and Indonesia, which have implemented more aggressive regulatory streamlining measures to attract foreign investment. Thailand’s Board of Investment reported an 18% increase in investment in Q1 2026, partly supported by its “Fast Pass” programme aimed at accelerating approvals. On Friday, Anutin met leading Thai billionaires and industry executives to discuss investment, competitiveness, employment and long-term economic growth strategies.

MALAYSIA
Malaysia likely to have reached peak growth in Q1 2026, momentum to moderate for remainder of year
(19 May 2026) BMI Country Risk & Industry Research, a unit of Fitch Solutions, said Malaysia’s economy likely reached its growth peak in Q1 2026 and expects momentum to moderate for the remainder of the year due to rising geopolitical risks and weaker global demand. Malaysia’s GDP grew 5.4% in Q1 2026, easing from 6.2% in Q4 2025, according to data released by Bank Negara Malaysia. BMI maintained its 2026 real GDP growth forecast at 4.3%, citing risks linked to the ongoing US-Iran conflict that could weaken economic activity and investor sentiment in Malaysia. The research house also said proposed fuel subsidy rationalisation for higher-income groups could soften consumer sentiment and reduce discretionary spending among households that contribute significantly to domestic demand. BMI noted private consumption remained the main driver of Q1 growth but warned prolonged geopolitical tensions could increase inflationary pressures and weaken domestic spending. It added that a wider escalation of the Iran conflict could push oil prices above its forecast of USD 90 per barrel, further fuelling inflation and slowing domestic activity. BMI also highlighted comments by BNM’s governor indicating inflation could move towards the upper end of the central bank’s 1.5% to 2.5% forecast range for 2026.

INDONESIA
Indonesian rupiah falls to record low against US Dollar
(18 May 2026) The Indonesian rupiah fell as much as 1.2% against the US Dollar on Monday, reaching a record low and becoming Asia’s worst-performing currency as markets reopened after a two-day holiday amid a broader global selloff linked to inflation and oil price concerns. The currency later closed down 1.1% at 17,656 per dollar. Indonesian equities also declined, while the benchmark 10-year government bond yield rose 17 basis points. Investor concerns were driven by prolonged high oil prices, Indonesia’s energy subsidy burden, and higher global yields, with Australia & New Zealand Banking Group forecasting an interest-rate increase by Bank Indonesia on Wednesday. Investor sentiment has weakened further following uncertainties over a possible equities reclassification to frontier market status and negative credit outlook revisions by Fitch Ratings and Moody’s Ratings. The rupiah has fallen more than 5% this year, making it Asia’s second-worst performing currency after the Indian rupee. Bank Indonesia’s governor said the central bank would intensify intervention measures and maintained that foreign-exchange reserves remained “more than adequate”. Warjiyo also said the rupiah could strengthen to an average of 16,500 per dollar this year as domestic demand for US dollars eased. The central bank has been selling short-term government bonds and purchasing longer-term bonds to stabilise yields. Analysts questioned the effectiveness of these measures given oil-price shocks and concerns over domestic fiscal policy.

THE PHILIPPINES, UNITED STATES
Philippine officials reject special US status for planned Luzon industrial hub
(19 May 2026) Philippine officials said the proposed 1,620 hectares Pax Silica industrial hub in New Clark City would remain fully subject to Philippine laws and rejected US proposals that would allow the project to operate under American jurisdiction or grant diplomatic immunity to US personnel. The president of the Bases Conversion and Development Authority said the project would instead operate under the Philippines’ Special Economic Zone Act and BCDA law governing former US military base developments. The clarification followed reports that the United States sought arrangements placing the hub beyond Philippine jurisdiction. The project forms part of the US-backed Luzon Economic Corridor initiative linking industrial hubs in Luzon to Manila’s ports and logistics infrastructure. The US Undersecretary of State for Economic Growth, Energy and the Environment visited New Clark City on 18 May to unveil a project marker and said negotiations on investor protections and project terms would continue over a two-year period. The Undersecretary said more than a dozen US companies, including several billion-dollar firms, joined the delegation and expressed interest in participating in the industrial ecosystem. A Philippine government document presented to the US State Department stated Manila would offer a two-year lease-free grace period as an in-kind contribution to bilateral economic security cooperation. Pax Silica is intended to support a US-led supply chain strategy covering critical minerals, semiconductors, advanced manufacturing and data infrastructure, reducing dependence on China-dominated supply chains. The Undersecretary said vulnerabilities in rare earths, magnets and semiconductor packaging had created a “predictably unreliable” system, adding that concentration of critical inputs in one country created supply chain risks. The Philippines’ Trade Undersecretary said the country aims to move beyond exporting raw nickel and copper towards producing higher-value “green tech metals” used in batteries, semiconductors, data centres and AI-related industries.

VIET NAM
Viet Nam’s economic growth to slow to 6.8% in 2026 from 8% in 2025
(16 May 2026) The World Bank forecast Viet Nam’s economic growth would slow to 6.8% in 2026 from 8% in 2025, citing softer global conditions and rising risks linked to the Iran conflict. The bank said Viet Nam’s outlook remained solid but warned that the external environment had become more challenging due to weaker global demand and higher oil prices. The World Bank said the oil shock had increased downside risks to the economy. Viet Nam continues to target annual GDP growth of at least 10% for 2026 and the remainder of the decade. The World Bank said Viet Nam was facing inflationary pressures related to the Iran war, with April inflation exceeding the government’s 4.5% target. The bank forecast inflation at 4.2% for 2026. It also warned that Viet Nam’s banking sector was experiencing funding strains as credit growth continued to outpace deposit mobilisation. The World Bank said a prolonged Middle East conflict could weaken Viet Nam’s exports and intensify banking sector and currency pressures amid high corporate leverage and limited foreign exchange reserve coverage. The institution urged Viet Nam to transition from a growth model driven by factor accumulation and bank-led financing towards productivity-led growth, deeper capital markets and higher-quality foreign direct investment.

CAMBODIA
Cambodia records over 2.4 million international air passengers in first four months of 2026
(17 May 2026) Cambodia recorded almost 2.43 million international air passengers in the first four months of 2026, down 4% from the same period last year, according to a report issued by the State Secretariat of Civil Aviation (SSCA). A total of 33 international and domestic airlines operated 23,204 flights to Cambodia’s three international airports during the January-April period, representing a 2% increase year on year. Air cargo volume rose 36% to 30,448 tonnes over the same period. Cambodia’s operational international airports are Techo International Airport in Phnom Penh, Siem Reap Angkor International Airport and Sihanouk International Airport. The SSCA said 29 international airlines and four domestic airlines currently operate flights linking Cambodia with ASEAN countries as well as China, South Korea, Japan, Qatar, India and the United Arab Emirates.