ASEAN 
Sliding currencies bring higher import costs and inflationary pressures for ASEAN
(16 October 2023) Several Southeast Asian currencies are trading near their lows for the year against a surging US Dollar, bringing higher import costs and inflationary pressures to their economies. The Malaysian ringgit and the Thai baht are the worst performers in Southeast Asia in 2023, falling 6.9% and 4.4%, respectively, against the US Dollar through 13 October, 2023. Meanwhile, the Vietnamese dong is down 3.4%, while Singapore’s dollar and Indonesia’s rupiah have slipped a more modest 2.1% and 0.7%, respectively. The broader depreciation comes amidst a surging US Dollar being fueled by strong US economic and wage growth. Exporters have been unable to take advantage of a weaker currency due to a sluggish Chinese economy, with China being the main trading partner for most ASEAN economies. 

ASEAN 
Southeast Asia’s dairy industry attracts private equity deals
(17 October 2023) Southeast Asia’s nascent dairy industry is attracting private equity (PE) deals hoping to cash in on the growing consumption of dairy products within the region. The growth of the regional dairy industry is being fueled by favorable demographics, a growing middle class, and higher discretionary spending. PE firm Growtheum announced an investment of US$100 million in Viet Nam-based International Dairy Products (IDP) in April 2023. In August 2023, Growtheum injected US$70 million into Indonesia’s KIN Dairy. As well for this year, General Atlantic made a US$130 million investment into Indonesian dairy products and foods company PT Cisarua Mountain Dairy (Cimory), while Vietnamese colostrum milk producer VitaDairy is looking to sell a 30% stake. Several challenges facing Southeast Asia’s dairy industry include fragmented farming practices and underdeveloped logistics infrastructure.  

ASEAN 
ASEAN states expanding their major airports to meet rising domestic demand
(18 October 2023) Several ASEAN are seeking to expand their major airports to meet rising domestic demand as well as to attract foreign direct investment and tourism. Air passenger demand in the region is expected to nearly triple in the two decades from 2019, with the region’s average annual growth rate of 4.6% higher than the global average of 3.4%. In Thailand, a new satellite terminal opened at Suvarnabhumi Airport near Bangkok in September 2023 which can host up to 28 aircraft and handle 15 million passengers annually. In Viet Nam, US$4 billion will be invested to increase the capacity of Hanoi’s Noi Bai International Airport to 60 million passengers by 2030, 2.5 times its current amount.

ASEAN, JAPAN 
Japanese automakers dominance of Southeast Asia challenged by Chinese and Korean EVs
(16 October 2023) Japanese automakers traditional dominance of Southeast Asia is being challenged by Chinese and South Korean manufacturers within the new field of electric vehicles (EVs). These companies have started sales of imported EVs in the region, while also planning for local production in the near future. Japanese cars comprise 80% of new car sales in Southeast Asia, making the region a key overseas market for them. Japanese automakers are more cautious when it comes to EVs due to a lack of recharging facilities within the region, as well as the region’s high temperatures and humidity which causes batteries to deteriorate more quickly. However, certain Japanese automakers have taken tentative steps towards EVs, with Mitsubishi Motors seeking to produce EVs in Indonesia while Toyota Motor and Honda are preparing to produce them in Thailand.     

INDONESIA 
Indonesia reports US$3.42 billion trade surplus in September 2023
(16 October 2023) Indonesia reported a US$3.42 billion trade surplus in September 2023, compared with a Reuters poll expecting a US$2.13 billion surplus. In August 2023, Indonesia reported a US$3.12 billion surplus. The higher-than-expected trade surplus was attributed to an unexpectedly large drop in imports, measuring at US$17.34 billion in September, a 12.45% drop year-on-year. On the other hand, exports dropped 16.17% year-on-year to US$20.76 billion. Indonesia has seen exports decline in recent months due to falling commodity prices and weakening global trade, especially with regard to the country’s major exports of palm oil, coal, and nickel.

VIET NAM 
GDP increases by 5.33% year-on-year in third quarter of 2023
(18 October 2023) According to government reports presented at the 27th session of the National Assembly (NA) standing committee, GDP is estimated to have increased by 5.33% year-on-year in the third quarter of 2023. In comparison, GDP growth in the first and second quarters of 2023 was 3.28% and 4.05%, respectively. GDP growth for 2023 is forecast to exceed 5%, while Viet Nam’s trade surplus will reach approximately US$15 billion. In the last nine months of 2023, average incomes increased by 6.8% year-on-year. The key growth drivers of investments, exports, and consumption in Viet Nam are expected to face systematic challenges caused by a lack of long-term direction, and prompt intervention with regards to green transformation, energy efficiency, and circular economy.

SINGAPORE 
Key exports from Singapore extend their 12th straight month of decline in September 2023
(18 October 2023) Key exports from Singapore extended their 12th straight month of decline in September 2023, with non-oil domestic exports falling by 13.2% year-on-year. This followed a revised 22.5% contraction in August. Exports in September were also up 11.1% month-on-month, compared to the 6.6% fall in August. Non-electronic non-oil domestic exports declined by 13.6% year-on-year, with non-monetary gold, pharmaceuticals, and food preparations contributing the most to the decline. Meanwhile, electronics shipments fell 11.6% year-on-year in September. Integrated circuits, personal computers, and parts of personal computers contributed the most to the fall. Total trade declined by 12.3% year-on-year in September, following a 15.5% contraction in August.  

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CHINA 
GDP likely to grow by 4.4% year-on-year in third quarter of 2023 according to Reuters poll
(16 October 2023) According to a median forecast of 60 economists polled by Reuters, China’s GDP likely grew by 4.4% year-on-year in the third quarter of 2023. This would be a slowdown from the 6.3% growth recorded in the second quarter. China’s economy had started to slow down in the second quarter following a downturn in the property sector and huge debts tied to decades of infrastructure outlays. On a quarterly basis, GDP is forecast to grow 1.0% in the third quarter of 2023, versus growth of 0.8% in the previous quarter. The Reuters poll also predicted that China’s economy would expand by 5.0% in 2023, in line with Beijing’s own target but below the 5.5% forecast made in July 2023. Growth is expected to slow down to 4.5% in 2024.

SOUTH KOREA 
South Korea moving to increase number of foreign workers to address labor shortages
(17 October 2023) South Korea is moving to significantly increase the number of incoming foreign workers and the range of jobs they can do to address labor shortages. In 2023, the country raised the maximum number of visas available to migrant workers from abroad to 110,000. The total number of visas available in 2022 was 88,000, also an all-time high, up drastically from the pre-COVID-19 count of 51,000 in 2019. Foreign workers in South Korea overwhelmingly work in unskilled or semiskilled jobs. Business owners have called for laws to be adjusted to make it easier for foreign nationals to take jobs in more sectors that face labor shortages, such as restaurants, accommodations, and courier services.

NEW ZEALAND 
Right-wing coalition to form government following general election on 14 October, 2023
(14 October 2023) A coalition of right-wing parties is expected to form a government following a general election held on 14 October, 2023. The centre-right National Party had acquired around 40% of ballots with 98% of votes already counted, while the ruling Labour Party has been unable to win enough votes to form a government. The nationalist NZ First party is expected to play a kingmaker role in the future coalition government alongside the libertarian, right-wing Act Party. The campaign entering the election was dominated by cost of living issues, a housing shortage, a historically high inflation rate of 6%, and an account deficit that has concerned ratings agencies. Official results will be announced by the election commission about three weeks after the vote.

THAILAND
Economists warn government’s US$15 billion cash handout policy risks stoking inflation
(09 October 2023) According to a statement signed by 81 economic experts (including two former Bank of Thailand governors), the government has been urged to scrap its flagship US$15 billion cash handout policy, claiming it risks stoking inflation and hurting long-term fiscal discipline. The government’s ‘digital wallet’ program would give most Thais a one-time handout of 10,000 baht (US$270), and is expected to be rolled out in the first quarter of 2024. Thais aged 16 and above are eligible to receive the handouts, and the money is to be spent on specific goods and services around their neighborhoods and within a set period. Proponents of the policy claim the multiplier effect on the economy could be four times the cost of the handouts and lift economic growth to as high as 5% in 2024.

THE PHILIPPINES, CAMBODIA
Cambodia and the Philippines mull establishing direct flight connections
(10 October 2023) Cambodia and the Philippines are discussing establishing direct flights between their countries in order to bolster tourism. Philippine Airlines had reportedly agreed to promote direct flights to Cambodia in the near future. The Cambodian Minister of Foreign Affairs and International Cooperation met with the Filipino ambassador on 05 October, 2023 to discuss economic diplomacy. During the meeting, both parties pledged to strengthen bilateral collaboration in trade, investment, agriculture, defence, and in fostering people-to-people ties.

THE PHILIPPINES
The Philippines’ central bank not ruling out 25-basis-point interest rate hike in November 2023
(11 October 2023) The Philippines’ central bank, the Bangko Sentral ng Pilipinas (BSP), has not ruled out a 25-basis point interest rate hike in November 2023 due to upside risks to inflation having materialized. Recent data showed inflation accelerated to a four-month high of 6.1% in September 2023, surpassing all economist’s estimates in a Bloomberg survey. These figures were driven by the fastest gain in rice prices in 14 years. For the past four meetings, the BSP has held its policy rate steady at 6.25%, a 16-year high. The BSP is currently watching the elevated debt levels at some Filipino companies, warning that some of them will be unable to pay off their loans. 

MALAYSIA
Federal government spent US$11.73 billion on various subsidies in 2022
(10 October 2023) According to the 2022 Auditor-General’s Report, the federal government spent some US$11.73 billion on various subsidies in 2022, an increase of 322.1% compared to 2021. In comparison, the government spent US$2.78 billion on subsidies in 2021. The highest subsidy expenditures went to petroleum products, comprising 81.5% of the total expenditure. A total of US$9.56 billion was spent on subsidizing petroleum products. The report also stated that the finance ministry spent US$25.43 billion, or 40.8% of the government’s total operational expenditure for 2022. This was a 64.5% increase compared to 2021. In June 2023, Prime Minister Anwar Ibrahim said his administration was working on implementing targeted subsidies. The government expects to save at least US$1 billion to US$2 billion a year from its shift towards targeted subsidies. 

INDONESIA
Geothermal operator Barito Renewables Energy’s shares up 25% in market debut in Jakarta
(09 October 2023) On 09 October, 2023, Indonesian geothermal operator Barito Renewables Energy’s shares were up 25% in the company’s market debut on the Indonesia Stock Exchange, after having raised US$200 million in an initial public offering last week. More than 4 billion shares were sold to the public, representing just 3% of the company, which is a subsidiary of Indonesian energy group Barito Pacific. Barito Renewables operates three geothermal power plants in West Java province with a combined installed capacity of 886 megawatts. The successful listing marks another test of investors’ appetite for Indonesia’s underdeveloped renewable energy sector.

VIET NAM
Exports drop 8.5% year-on-year to US$258.97 billion in the first nine months of 2023
(10 October 2023) According to government customs data, Viet Nam’s exports fell 8.5% year-on-year to US$258.97 billion in the first nine months of 2023. Imports in the same period fell 14.0% to US$237.33 billion, resulting in a trade surplus of US$21.64 billion. Exports in September fell 6.3% month-on-month to US$30.68 billion, while imports dropped 2.9% to US$28.48 billion. These figures indicate weak global demand, with exports of smartphones falling 13.7% in the first nine months of 2023, while exports of garments fell 13.6%. The subdued demand tracks that of other regional export economies, and has caused economists to slash growth forecasts for Viet Nam. 

CAMBODIA
Cambodia draws in US$3.76 billion worth of investments in first nine months of 2023
(09 October 2023) Cambodia drew in US$3.76 billion worth of fixed-asset investments in the first nine months of 2023, marking an 8.6% rise from the US$3.46 billion worth of investments recorded in the same period in 2022. According to data released by the Council for the Development of Cambodia (CDC) on 07 October, 2023, in the same period they approved 191 investment projects, a 27% increase from the 150 projects approved in the same period in 2022. These foreign investments came primarily from China, Malaysia, Singapore, Viet Nam, and the British Virgin Islands. The Asean+3 Regional Economic Outlook (AREO) has projected that Cambodia’s economy will grow by 5.9% in 2023. 

RCEP Monitor

SOUTH KOREA
Samsung Electronics’ operating profit likely falls 77.9% in third quarter of 2023
(11 October 2023) Samsung Electronics stated that it expects its operating profits to have reached US$1.8 billion in the third quarter of 2023, a drop of 77.9% year-on-year. This has been attributed to an overhang from a long slump in memory chip prices. The company’s revenue is believed to have dropped 12.7% year-to-year to US$50.01 billion in the same quarter. On a quarter-on-quarter basis, the company’s operating profit likely jumped 258.2%, while revenue increased by 11.7%. Analysts believe the company’s performance may rebound in the fourth quarter of 2023 due to industry players making big production cuts. 

NEW ZEALAND
New Zealand sees record net immigration in the year ending August 2023 at 110,000
(11 October 2023) According to Statistics New Zealand, New Zealand saw record net immigration in the year ending 2023 at 110,000. This beat the previous high of 103,000 set a month earlier. The surge in immigration likely reflects pent-up demand that had built up during the COVID-19 pandemic, with employers struggling to find skilled workers to fill vacant roles in 2022. The figures show the greatest number of immigrants came from India, followed by the Philippines and China. The total number of immigrants reached a record number of 225,000 during the year, while the number of New Zealanders leaving the country also neared record levels at 115,000. Many New Zealand citizens have been lured to Australia seeking better pay.

AUSTRALIA
Australia has highest level of mortgage stress in the developed world
(10 October 2023) According to the International Monetary Fund, Australia has the highest level of mortgage stress in the developed world, with 15% of income devoted to paying off loans. Australian borrowers have been affected by a series of rate rises by the Reserve Bank of Australia (RBA) starting in May 2022. The increased cost of borrowing has left Australia with the highest level of debt stress in the developed world, followed by Canada, Norway, and the Netherlands. In July 2023, the Australian National University calculated that if the RBA increased the current rate by another 50 basis points to 4.6%, Australians would be paying 40% of their income into their mortgages and other loans.   

ASEAN
Southeast Asian tech giant’s shares diverge, with Grab jumping due to cost-cutting measures
(28 August 2023) The stock prices of Southeast Asian tech giants such as Grab, GoTo, and Sea have greatly diverged in 2023 as investors seek companies that have engaged in cost-cutting rather than those with costly growth plans. Grab Holding’s shares are up 15% this year through 25 August, 2023, reflecting strong demand for its ride-hailing and food delivery segments as well as cost-cutting measures announced in June which would see more than 1,000 jobs slashed (11% of its total workforce). The ride-hailing and food delivery giant now expects to break even on a group level in the third quarter of 2023 on an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) basis, ahead of its previous target for the final quarter. By contrast, Sea’s shares plunged 29% after the company announced it intends to boost investment into its e-commerce business Shopee. The company warned this might lead to losses.

THAILAND
Office of Industrial Economics downgrades industrial GDP for 2023, projects 1.5% to 2.5% contraction
(01 September 2023) Thailand’s Office of Industrial Economics (OIE) has downgraded its estimation for Thailand’s industrial GDP for 2023, now projecting a contraction of between 1.5% to 2.5%. Earlier in June 2023, the OIE had predicted that industrial GDP for this year would expand by 0.0% to 1.0%. The OIE had also downgraded its estimation for Thailand’s manufacturing production index (MPI) for 2023, projecting a contraction of 2.8% to 3.8%. It had previously projected that MPI would expand by 0.0% to 1.0%. These downgrades were attributed to factors including the declining purchasing power of the agricultural sector, the global economic slowdown, financial problems affecting export partners, geopolitical conflicts, climate change’s impact on agricultural output, high energy prices as well as higher interest rates. These factors have driven up manufacturing costs while also diminishing the competitiveness of Thai products in global markets.

THAILAND
Proposed visa waiver for Chinese and Indian tourists expected to boost tourism revival
(01 September 2023) The Thai government is proposing a visa waiver for Chinese and Indian tourists, sparking hopes for the revival of Thailand’s tourism sector. The lengthy visa application process has been cited as a bottleneck for the industry. In the first half of 2023, the average waiting time for a Chinese visitor to obtain a tourist visa to Thailand was nearly 15 days. Indian and Chinese tourists can also apply for a visa on arrival, albeit with several requirements. It is hoped that the new Thai government can implement the plan before the peak season in November 2023. The country expects to welcome up to 30 million international tourists in 2023, nearly thrice the numbers in 2022 though still lower than the 40 million received in 2019 (prior to the COVID-19 pandemic).

MALAYSIA
Property prices and rentals in Johor Bahru now closing to rates in Klang Valley
(21 August 2023) Property prices of high-rise projects and rental rates at shopping malls in Johor Bahru city center are now closing to rates in the Klang Valley, driven by the effects of the Johor Bahru-Singapore Rapid Transit System (RTS) Link and a strong Singapore dollar. According to RHB Investment Bank, a lot of infrastructure projects, property developments, facility expansions, and investments are taking place in Iskandar Malaysia, a development zone formed by major cities in Johor state. It has also been noted that expensive rental rates in Singapore are starting to drive up rental rates in Johor Bahru city center. As well, malls located in the city center are expected to benefit from greater connectivity and higher shopper traffic from Singapore.

INDONESIA
Indonesia’s CPI rises by 3.27% in August 2023, within central bank’s target range
(01 September 2023) Indonesia’s consumer price index (CPI) rose by 3.27% in August 2023, a slight increase from the 3.08% recorded in July. The CPI score in August is still within Bank Indonesia’s 2023 inflation target range of 2% to 4%. Annual core inflation, which strips out government-controlled prices and volatile food prices, eased in August to 2.18% from 2.43% in July. While headline inflation only rose modestly, annual rice inflation accelerated to 13.76% in August, the highest since June 2012. Indonesia is suffering from tight domestic supply of rice due to paddy fields having been hit by drought linked to the ongoing El Niño weather pattern. In response, the Indonesian government has approved an import quota of 2.3 million metric tonnes to help boost rice supplies at home.

INDONESIA
Government expands subsidy program for electric motorcycle purchases
(30 August 2023) The Indonesian government has expanded a subsidy program for the purchase of electric motorcycles. Through the program, Indonesians will receive a discount of US$460 valid for the one-time purchase of an electric motorcycle. The expansion of the assistance program comes five months after the government first introduced the subsidy to selected groups of people earlier in March 2023. The program is aimed at accelerating the setting up of an electric vehicle (EV) ecosystem in the country. Electric motorcycle sales had risen 191% from around 12,000 units in 2021 to 35,000 in 2022.

SINGAPORE, MALAYSIA, INDONESIA
Data center operators in Singapore exploring alternative sites in Malaysia and Indonesia
(31 August 2023) Data center operators in Singapore are exploring alternative sites in Malaysia and Indonesia due to Singaporean authorities limiting the construction of new facilities due to space constraints and enviromental concerns. Princeton Digital Group (PDG) is scheduled to complete a US$450 million data center with a capacity of 150 megawatts in Malaysia’s Johor Bahru in May 2024, while another facility is being planned in Indonesia’s Batam Island. In 2019, Singapore paused the construction of new data centers due to enviromental concerns. In July 2023, the government ended the moratorium and awarded rights to four operators, including Microsoft and a consortium comprised of China’s ByteDance and Australia’s AirTrunk. Capacity was limited to just 80 MW for the four winners.

RCEP Monitor

THAILAND
Srettha Thavisin of Pheu Thai Party officially appointed as country’s 30th prime minister
(23 August 2023) On 23 August, 2023, 61-year-old property tycoon Srettha Thavisin of the Pheu Thai Party received a royal endorsement from King Maha Vajiralongkorn to become the country’s 30th prime minister. The new government will be formed after the appointment of his cabinet ministers, with Pheu Thai currently negotiating with its coalition partners. Among Srettva’s key policies include transferring US$286 into the digital wallets of people over age 16 across the country, to be spent in small shops within a 4-kilometer radius of the recipient. He also intends to hike the minimum wage to THB600 (US$17.07) per day, nearly double the current THB300 (US$8.53) to THB330 (US$9.39). Srettha forms a government amidst a slowing economy, having expanded 1.8% year-on-year in the second quarter of 2023. This is a slower pace than the 2.6% expansion in the first quarter. Exports of goods contracted 5.7% in the second quarter.

THAILAND
Property sector’s post-pandemic recovery delayed due to political uncertainty
(25 August 2023) The post-COVID-19 pandemic recovery of Thailand’s property sector has been delayed due to the country’s ongoing political uncertainty. More than three months after the country’s general elections on 14 May, 2023, a new cabinet has still not been identified. The real estate sector is one of the key drivers of the Thai economy, contributing about 10% of GDP. Many developers have delayed launches due to the current political vacumn. It was projected that almost 45,000 new condominium units would be launched in the Bangkok Metropolitan area. However, after the first half of 2023, only 12,000 units have been launched. Rising interest rates have also affected the sector, as it is causing consumers to delay purchases.

THAILAND, INDONESIA, MALAYSIA 
Central banks of Malaysia, Indonesia, and Thailand sign MOUs to strengthen cooperation and promote usage of local currencies
(25 August 2023) The central banks of Malaysia, Indonesia, and Thailand, Bank Negara Malaysia (BNM), Bank Indonesia (BI), and the Bank of Thailand (BOT) respectively, have signed three bilateral memoranda of understanding (MoUs) on a framework for cooperation to promote the usage of local currencies in bilateral transactions between the countries. According to BNM, the scope of the framework has been expanded to include more eligible cross-border transactions beyond trade and direct investments. The new framework also intends to synergise with cross-border payment initiatives to create more accessible and efficient local currency settlements to enhance regional financial market stability and strengthen cross-border economic activities.

MALAYSIA
Rate of inflation slows down to 2% year-on-year in July 2023, lowest so far in 2023
(25 August 2023) According to Malaysia’s National Statistics Department, Malaysia’s rate of inflation slowed down to 2% year-on-year in July 2023, its lowest so far this year. This was attributed to a slower increase in the costs of restaurants and hotels and food and non-alcoholic beverages. This was lower than the 2.4% growth recorded in June. Monthly headline inflation eased to 0.1% against 0.2% recorded in June, while core inflation increased 2.8% as compared to 3.1% the preceding month. Food and non-alcoholic beverages recorded a moderate increase of 4.4%, while the restaurants and hotels category registered a 5% increase.

SINGAPORE
Grab expected to turn its first quarterly profit earlier than projected
(24 August 2023) Singapore-based Grab expects to turn its first quarterly profit sooner than projected. The company now expects to break even on a group level in the third quarter of 2023 on an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) basis, ahead of the previous target of the final quarter. Grab also expects to narrow their adjusted EBITDA loss for 2023 to US$30 million to US$40 million, compared with an earlier forecast of a US$195 million to US$235 million loss. On 23 August, 2023, the company announced a US$148 million loss for the second quarter, compared with a US$572 million loss for the same period in 2022. This follows a series of cost-cutting measures as well as increased demand for the company’s ride-hailing and food delivery services.

THE PHILIPPINES
Central bank expects GDP growth in 2023 to miss government target
(21 August 2023) The Philippines’ central bank, the Bangko Sentral ng Pilipinas (BSP), expects GDP growth in 2023 to miss the government’s target due to moderating economic activity and the impact of recent rate hikes. The BSP stated that growth this year could settle below the official target of 6% to 7% for 2023 and 6.5% to 8.0% for 2024 and 2025. The BSP stated that the economy is expected to ‘operate close to potential, on average, in 2023’, but will moderate over the policy horizon due to waning pent-up demand and the effects of prior monetary policy tightening. A policy horizon refers to the time required to bring inflation within the target of a central bank. The BSP has raised its key rate by 4.25 basis points since May 2022.

INDONESIA
Indonesian government to temporarily relax solar power rules to spur development of solar energy
(21 August 2023) The Indonesian government will temporarily relax solar power rules to help spur the development of solar energy within the country and to help it reach its target of net zero emissions by 2050. Authorities will remove requirements that mandate solar projects use a majority of domestically produced materials until 2025, when Indonesia’s first solar panel factory is expected to begin production. Lifting local content requirements for solar was one of more than a dozen policy reforms laid out in the draft investment plan for the US$20 billion Just Energy Transition Partnership that Indonesia previously negotiated with the United States and other wealthy countries. Authorities intend to increase its solar power capacity fivefold in the next five years, and will require nearly US$2.4 billion to do so.

RCEP Monitor

MALAYSIA
Six state elections held in Malaysia end with status quo results
(13 August 2023) On 12 August, 2023, six states in Malaysia held state elections, seen by pundits as indicative of the level of support for the ruling unity government of political coalitions Pakatan Harapan (PH) and Barisan Nasional (BN). State elections were held in the states of Kedah, Penang, Kelantan, Terengganu, Selangor and Negeri Sembilan, and saw the PH-BN unity government compete with the opposition coalition Perikatan Nasional (PN). The state elections ended with a status quo result, with PH-BN holding onto Selangor, Negeri Sembilan, and Penang, while PN held onto their states of Kedah, Kelantan, and Terengganu. That being said, PN was able to make inroads into certain seats in PH-BN-held states. PN was able to deny PH-BN a two-thirds majority in the economically key state of Selangor.

THAILAND
Tropical resorts attract foreign tourists seeking to escape heat waves at home
(13 August 2023) Tropical resorts in Thailand are attracting foreign tourists seeking to escape heat waves at home. In parts of the world impacted by heat waves, such as parts of the United States and southern Europe, authorities have urged residents to refrain from going out, making it difficult for tourists to visit the regions. A byproduct of the heat waves, fueled by climate change, may ultimately prove welcome for Thailand’s COVID-19-hit tourism sector. The summer vacation season in Europe, the U.S., and Japan runs from June to October, corresponding to Thailand’s rainy season, which foreign tourists typically like to avoid. But should Thailand still be able to attract foreign visitors even during its rainy season, the still-recovering tourist industry stands to benefit.

THAILAND
Domestic milled rice prices jump nearly 20% last week after rice export ban by India
(17 August 2023) A recent rice export ban by India on 20 July, 2023, has triggered chaos in Thailand’s rice trading, with domestic milled rice prices jumping nearly 20% last week to US$597 per ton, up from around US$479 over the previous few weeks. This has pushed up the Thai export price for benchmark white rice by 5% to US$610 per ton, reflecting the rise in global prices, which have surged to an 11-year high. Although Thai authorities have not limited rice exports, exporters are still reluctant to sell due to uncertainty over supplies. Cases of hoarding are expected to push Thai rice prices to uncompetitive levels. In addition, the El Nino dry weather pattern is expected to limit Thailand’s rice harvest and prevent the country from exporting more rice in 2023 and 2024.

THE PHILIPPINES, VIET NAM, INDIA
The Philippines negotiating with Viet Nam and India to import rice to lower prices
(12 August 2023) The Philippines is currently negotiating with India and Viet Nam to import rice in order to boost its buffers and lower prices. According to Filipino officials, Vietnamese exporters have already quoted prices that are as much as US$40 lower than at a recent meeting. It is hoped that this will pave the way for the Philippines to get better terms for an additional 300,000 metric tons to 500,000 metric tons of rice importation for 2023. The additional rice purchases may lower prices for Filipinos as it will boost national inventory, which even without imports is expected to last for 52 to 57 days by the end of 2023. In December 2022, Filipino agriculture officials stated that rice imports in 2023 will reach around 2.5 million metric tons, from about 3.5 million metric tons in 2022.

THE PHILIPPINES
Central bank keeps policy rate steady at 6.25% for third straight meeting
(17 August 2023) The Philippines’ central bank, the Bangko Sentral ng Pilipinas (BSP), kept its benchmark interest rate unchanged at 6.25% for a third straight meeting on Thursday. BSP stated it needed to balance the need to support economic growth while keeping inflation in check. The BSP’s decision to extend its policy pause followed data released last week showing the domestic economy growing at its slowest annual pace in nearly 12 years in the second quarter of 2023. This was attributed to a decline in government spending and weaker domestic demand. While prices cooled for a sixth straight month in July 2023, the 4.7% inflation rate remained outside the official target of 2% to 4% inflation.

INDONESIA
Indonesia to launch Southeast Asia’s first high-speed rail in October 2023
(16 August 2023) Indonesia is set to launch Southeast Asia’s first high-speed rail in October 2023. The 140-kilometer track that connects Jakarta and Bandung will have a top operating speed of roughly 350 kilometers per hour, and the entire line can be traversed in as little as 36 minutes. The Indonesian government had set October as the new opening date for commercial operations after pushing back the previous timeline of August. A trial launch is planned for September and October. The high-speed rail is part of China’s landmark Belt and Road Initiative project. The project was initially set to open by 2018, after having broken ground in 2016. Contributing to the delays were difficulties in acquiring land.

SINGAPORE
Sea Ltd. to ramp up investments into e-commerce unit Shopee amidst increasing competition from new rivals like Tiktok
(16 August 2023) Singapore-based tech giant Sea Ltd. plans to ramp up investments into its e-commerce unit Shopee amidst increasing regional competition from new rivals like TikTok. Chinese short video platform Tiktok launched online shopping service TikTok Shop in 2021. Sea did not disclose any figures regarding the investments, although it acknowledged that said investments will impact its bottom line and may result in losses for Shopee and Sea Group as a whole in certain periods. Sea posted a net income of US$330 million for the April-June period of 2023, a turnaround from a US$931 million loss in the same period in 2022. This was the company’s third consecutive quarterly profit.

RCEP Monitor

INDONESIA
Indonesia’s economy expands by 5.17% year-on-year in the second quarter of 2023
(07 August 2023) Indonesia’s economy expanded by 5.17% year-on-year in the second quarter of 2023, accelerating from a revised 5.04% expansion in the first quarter. These latest growth figures were the highest in three quarters. Private consumption, which makes up over half of Indonesia’s GDP, rose 5.23% year-on-year in the same quarter, while investments increased 4.63%. Private consumption was buoyed during the Islamic holy month of Ramadan held from late March to late April. Ramadan generally brings the year’s biggest monthly consumer spending, thanks to holiday bonuses that companies are obliged to pay their employees. Consumer spending is expected to grow steadily ahead of elections to be held in February 2024.

SINGAPORE, MYANMAR
Singaporean bank UOB cuts off counterparts in Myanmar in blow to military junta
(09 August 2023) Singaporean bank United Overseas Bank (UOB) is reportedly cutting off counterparts in Myanmar in what is expected to be a major blow to the country’s ruling military junta. In a confidential note sent to Myanmar banks last week, UOB stated it would restrict all incoming and outgoing payments to and from Myanmar accounts, only allowing funds to be moved between accounts held with the bank. It was also announced that tough new curbs on Visa card and Mastercard transactions for Myanmar individuals and banks would be implemented, which would restrict their dealings only to accounts within UOB. The new UOB framework is to take effect on 01 September, 2023, applying to transactions in all main currencies, including the U.S. Dollar, Euro and Singapore Dollar.

SINGAPORE
Singapore downgrades growth forecast for 2023 to 0.5% to 1.5%
(11 August 2023) Singapore downgraded its growth forecast for 2023 to 0.5% to 1.5% down from the 0.5% to 2.5% range earlier forecasted. This was attributed to a weak global economy and sluggish demand from key trading partners like China. GDP growth for the second quarter of 2023 stood at 0.5% year-on-year, compared with a preliminary 0.7% expansion announced in July and 0.4% growth in the first quarter. On a quarter-on-quarter seasonally adjusted basis, the country’s GDP expanded 0.1% in the second quarter, reversing a 0.4% contraction from the previous three months. These latest data demonstrate weaknesses in Singapore’s manufacturing sector outweighing the more resilient services sector. The manufacturing sector, which fell 7.3% year-on-year in the second quarter, accounts for a fifth of Singapore’s overall economy.

THAILAND
Thai equities rebound as domestic investors see months-long political standoff being resolved soon
(07 August 2023) Thai equities have seen a rebound as domestic investors see a potential end to the months-long political standoff that has paralyzed the country. The benchmark stock index has rallied more than 4% from a 28 June trough. While the SET gauge is still Asia’s worst-performing equity market in 2023, the recent performance outpaced a 1.6% gain in the broader regional gauge. Global funds have sold US$3.7 billion of the country’s equities thus far this year. Foreign investors are expected to stay away from Thai equities until there is more clarity about the new government to be formed. Since the general election held in May 2023, local investors have increased net equity purchases by US$1.64 billion, while foreign funds pulled a net US$1.67 billion from local stocks in the same period.

THE PHILIPPINES
Philippines’ economy slows down to 4.3% growth year-on-year in the second quarter of 2023
(10 August 2023) The Philippines’ economy slowed down to 4.3% growth year-on-year in the second quarter of 2023, a significant drop from the 6.4% growth recorded in the first quarter. Besides the pandemic years of 2020 and 2021, the annual expansion in the second quarter was the slowest since 2011. The economy fell 0.9% quarter-on-quarter, against a median estimate of a 0.6% gain. The drop in growth was attributed to high commodity prices, the lagged effects of rising interest rates, contraction in government spending, and a slowing global economy. Growth in the first half of this year stood at 5.3%, while policymakers target a 6% to 7% full-year expansion.

CAMBODIA
Government confident of hitting 16 million domestic tourists target for 2023
(09 August 2023) Authorities are confident of hitting its goal of 16 million domestic tourists in 2023. According to figures released by the Ministry of Tourism, as of the end of July, 2023, there were more than 12 million domestic tourists recorded in the first seven months of 2023. The ministry also predicted that Cambodia will greet five million international guests by the end of this year. By 2026, authorities believe that the number of international visitors will increase to about seven million. The months of July and August usually see less internal tourist movement due to the rainy season, with the numbers expected to rebound in September with the celebration of the traditional Buddhist festivals of Kan Ben and Pchum Ben.

VIET NAM
World Bank forecast Viet Nam’s GDP growth to slow to 4.7% in 2023
(10 August 2023) The World Bank has forecast that Viet Nam’s GDP growth would slow to 4.7% in 2023 from 8% in 2022, citing a challenging external environment and weak domestic demand. The global financial institution also predicted that growth would accelerate to 5.5% in 2024 and 6.0% in 2025. This comes as US President Joe Biden recently stated he would travel to Viet Nam as part of efforts to improve relations with Hanoi. Both parties have increasingly close trade links, and also share concerns vis-a-vis China’s geopolitical ambitions, the latter of which includes its sweeping claims over the South China Sea.

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MALAYSIA
Malaysia aiming to have renewables supply 70% of total energy supply by 2050
(31 August 2023) Malaysia has launched programs to promote renewable energy in an economy that has traditionally relied upon the hydrocarbons industry. Under the first phase of the National Energy Transition Roadmap (NETR) unveiled last week, the government identified 10 flagship catalyst projects and initiatives ranging from constructing renewable energy zones and creating biomass demand to carbon capture and promoting greener mobility. These projects are expected to generate estimated investments of more than US$5.5 billion and 23,000 jobs, while also reducing greenhouse gas emissions by the equivalent of more than 10,000 gigagrams of carbon dioxide per year. The government targets having renewables supply some 70% of the total energy supply by 2050.

THAILAND, CHINA
Renewable energy operator Energy Absolute to partner with Chinese firm to set up EV battery factory
(02 August 2023) Thai renewable energy operator Energy Absolute is currently negotiating with two Chinese manufacturers of electric vehicle (EV) batteries to build a new factory in Thailand. Energy Absolute is in talks with both EVE Energy and Sunwoda Mobility Energy Technology, China’s third-largest and fifth-largest lithium-ion battery producers respectively. The company hopes to set up an EV battery plant with an annual production capacity of 6 gigawatt-hours. This would mean the factory would have one of the largest battery production capacities in Thailand, rivaling the country’s oil and gas conglomerate PTT, which has partnered with Contemporary Amperex Technology in another 6 gigawatt-hours factory project. The new Energy Absolute battery factory is expected to supply EV batteries for Energy Absolute’s EV vehicles, ferries, and energy storage systems.

INDONESIA
Authorities hope new capital city can become new economic growth center
(02 August 2023) Indonesian authorities hope the new capital city Nusantara, located in East Kalimantan province on Borneo island, can become a new economic growth center for Indonesia. By August 2024, the Indonesian government will have already shifted some government functions to the new capital. The government also hopes to attract various industries to Nusantara, including renewable energy, health care, education, and agriculture. The relocation of the Indonesian government from Jakarta to Nusantara will take place in five phases through 2045. The population of Nusantara is projected to reach 60,000 in 2024, rising to 2 million by 2040 and more than 4 million in 2060. The city will have a land area of 2,561 sq. kilometers.

THAILAND
Thailand urges farmers to switch to other crops to save water amidst poor rainfall
(02 August 2023) Thai authorities are urging farmers to switch to growing other crops in order to save water amidst poor rainfall. Thailand is experiencing less rain as the nation braces for a potential drought next year with the onset of the El Niño weather pattern. Cumulative rainfall in the central region of Thailand has been about 40% below normal levels and the move to curb planting of rice is to help conserve water for household consumption. Thailand’s central region is a key rice-growing region, accounting for almost 14% of total rice-growing area in 2023, and forecasted to make up about 19% of the main paddy harvest in both 2023 and 2024. Rice prices in Asia surged to its highest in more than three years in July 2023 after India banned some of its rice exports. While India accounts for 40% of the global trade in rice, Thailand and Viet Nam make up 15% and around 14% respectively.

THE PHILIPPINES, EU
The Philippines and the EU to relaunch free trade negotiations
(31 July 2023) During a visit to the Philippines, European Commission President Ursula von der Leyen announced that the EU and the Philippines would relaunch negotiations for a free trade agreement. She stressed that the EU is seeking to diversify its supply chains and ‘de-risk’ trade relations. The EU will also provide US$514 million in funding for the ‘transition to a circular economy, and the generation of green energy’ through its Global Gateway sustainable investment plan. The EU will also launch a ‘digital economy package’ to bolster connectivity and make the Philippines a more attractive place for European businesses. The EU is the Philippines’ fourth-largest trading partner.

VIET NAM
Vietnamese government calls upon Samsung to create local talent pipeline for executives
(01 August 2023) The Vietnamese government calls upon Samsung to create a local talent pipeline for executives to lead its factories. Samsung has invested in Viet Nam for the last 15 years, with the country currently producing half of its global devices. Samsung Vietnam exports to 128 markets and comprises 17.4% of shipments from the Southeast Asian nation. Viet Nam has struggled to gain the necessary skills, technology, and supplier ecosystem to move up the value chain. The government also called upon Samsung to increase tech transfer, invest in female staff, and help Viet Nam move to a green and ‘socialist-oriented market economy’.

LAO PDR
Almost 1.7 million foreign tourists visited Lao PDR in first half of 2023
(01 August 2023) According to data compiled by the Tourism Marketing Department of the Ministry of Information, Culture and Tourism, almost 1.7 million foreign tourists visited the country in the first half of 2023. This is a significant increase from the first half of 2022, when only 211,971 foreign tourists came to Lao PDR. Data revealed that 668,595 visitors came from Thailand, 398,937 from Viet Nam,​ 317,634 from China, 72,958 from the Republic of Korea, 30,455 from the US, 18,145 from the United Kingdom, and 18,794 from France. Authorities and local businesses have joined forces to promote tourism and access a broader audience through international exhibitions, ASEAN tourism fairs, and the development of new tourism products.

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THE PHILIPPINES, MALAYSIA
The Philippines and Malaysia set to increase cooperation in areas including transnational crime, agriculture, and digital economy
(27 July 2023) The Philippines and Malaysia are set to convene joint meetings in October 2023 to increase cooperation in various areas including transnational crime, agriculture, and digital economy. This was agreed during the Philippines’ President Ferdinand Marcos Jr.’s three-day state visit to Malaysia. Other areas which will see bilateral cooperation include halal industry, Islamic banking, education, tourism and culture, and sports. The Malaysian government also offered to help build capacity in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) in the southern Philippines, especially in priority sectors such as halal, Islamic banking, and food security. In 2022, Malaysia was the 10th largest trading partner of the Philippines, with trade totaling US$8.84 billion. Malaysia also ranked as the Philippines’ 11th largest export destination and 9th largest import source, valued at US$2.46 billion and US$6.38 billion respectively.

ASEAN
Honda Motor to launch e-motorbike sales in Indonesia, sees Southeast Asia as promising market
(26 July 2023) Global motorcycle leader Honda Motor will be launching its first electric two-wheeler models in Indonesia, seeing Southeast Asia as a promising market for its e-motorcycles. The EM1 e: scooter, scheduled to go on sale in Japan in late August 2023, will be the first electric motorcycle made by Honda for the Indonesian market. Honda plans to release another model in Indonesia within the year, and two more in 2024. There are plans to sell seven e-motorbike models by 2030, with a sales target that year of 1 million units. Honda aims to sell 3.5 million e-motorbikes globally in 2030, with close to 30% of those sales expected to come from Indonesia. The Southeast Asian motorcycle market reached 10.6 million units in 2022, and is the world’s third-largest market after China and India.

INDONESIA
Indonesian e-commerce and superapp company GoTo makes e-wallet app accessible throughout the country
(26 July 2023) Indonesian e-commerce and superapp company GoTo made its e-wallet app accessible throughout the country, as it looks to tap into a large number of unbanked Indonesians. Previously, the e-wallet GoPay could only be accessed for payments via the apps of Gojek and Tokopedia, both of whom merged in May 2021 to form GoTo. By launching the app, GoTo hopes to extend its user base beyond its existing customers. According to research by Google, Temasek, and Bain & Co., over 80% of Indonesia’s population are unbanked or underbanked. Unbanked people do not have bank accounts, while those who are underbanked have bank accounts but insufficient access to financial services such as credit.

MALAYSIA
Malaysian government unveils plan to ‘reset’ Malaysia’s growth trajectory
(26 July 2023) On 27 July, 2023, the Malaysian government unveiled a plan to ‘reset’ Malaysia’s growth trajectory. The plan seeks to boost incomes and increase female labor force participation, while also reducing the budget deficit. The ten-year plan involves attracting companies that create high-income jobs for locals with tax breaks, boosting manufacturing, and implementing reforms to make its stock markets attractive. One of the key outcomes targeted by this plan includes achieving a fiscal deficit of 3% of GDP or lower. The Malaysian government also seeks to boost economic growth to 6% in the short-term. In 2023, officials project that the Malaysian economy will expand by between 4% to 5%.

SINGAPORE
Manufacturing output decreases 4.9% year-on-year in June 2023
(26 July 2023) According to the Economic Development Board, Singapore’s manufacturing output decreased 4.9% year-on-year in June 2023. Excluding biomedical manufacturing, manufacturing output fell 5.2%. On a three-month moving average basis, manufacturing output decreased 7.3% year-on-year in June 2023, while on a seasonally adjusted month-on-month basis, manufacturing output increased 5.0%. Looking at the performance of specific clusters, it was noted that output for transport engineering increased 10.8% year-on-year in June, while output for biomedical manufacturing decreased 1.8% year-on-year. For other clusters, it was observed that the electronics sector fell 2.9%; general manufacturing decreased 7.5%; chemicals output shed 8.6%; and precision engineering decreased 11.5%.

SINGAPORE, BRUNEI DARUSSALAM, CHINA        
China to reinstate its 15-day visa-free entry for citizens of Singapore and Brunei Darussalam
(23 July 2023) China will reinstate its 15-day visa-free entry for citizens of Singapore and Brunei Darussalam from 26 July, 2023 onwards. This follows a three-year suspension of visas as China adopted strict travel restrictions under its stringent zero-COVID-19 policy, which only ended in December 2022. According to the Chinese Embassy in Singapore, Singaporean citizens will be able to enter China without a visa for 15 days if they are there for business, tourism, family visits and transit. Visas already issued to Singaporeans will still be valid, while those that have been requested will be processed. According to Singapore’s Ministry of Foreign Affairs, the resumption of visa-free travel will facilitate people and business flows between our countries and pave the way for deeper bilateral cooperation.

CAMBODIA
Cambodian Prime Minister Hun Sen to step down, eldest run to succeed him
(26 July 2023) On 26 July, 2023, Cambodian Prime Minister Hun Sen announced he would step down, with his eldest son Hun Manet to succeed him. Hun Sen announced the post-election timeline of Hun Manet’s accession, with the next step coming in August 2023 when the National Election Committee formalizes the results of the national election held on 23 July, 2023. Following this, the newly elected lower house of parliament will convene and vote on Hun Manet’s candidacy. The ruling Cambodian People’s Party claimed 96% of parliamentary seats after its main rival, the Candlelight Party, was disqualified in May 2023. Hun Sen stated that he would run for a seat in Cambodia’s Senate in February 2024 and then become the Senate president.

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ASEAN
Amount raised through initial public offerings (IPOs) rise by 43% from January-June 2023
(19 July 2023) The amount raised through initial public offerings (IPOs) rose by 43% year-on-year in January-June 2023, even though the amount raised worldwide dropped by 30%. IPOs throughout this period raised US$4.1 billion, while the number of IPOs increased by 14% year-on-year to 79. Both the number of IPOs and the amount that they raised have been increasing since 2019. Indonesian gold and copper miner Amman Mineral International raised the most funds at the time of its IPO at over US$700 million. A portion of those funds will be used by the company to invest in the refining of copper and precious metals. Indonesia alone accounted for 41 IPOs, more than half of the total in Southeast Asia. The top four fundraisers were also Indonesian. With the current decline in the number of unicorn-level startup listings, stock exchanges in Southeast Asia are now seeing listings by medium-size companies and by companies affiliated with large corporate groups.

THE PHILIPPINES, JAPAN
The Philippines unveils new light rail cars for Metro Manila made using Japanese technology
(20 July 2023) The Philippines unveiled new light rail cars made using Japanese technology that will serve Metro Manila, connecting the northern and southern halves of the capital city. The new light rail cars were sought to improve transport capacity while also reducing congestion and pollution. The trains feature higher energy efficiency and lower maintenance costs than their predecessors. Japanese trader Mitsubishi Corp. is delivering 120 cars as part of a US$214 million order funded by an international yen loan, with the cars to be built by Spanish manufacturer CAF. The current administration of President Ferdinand Marcos Jr has initiated rail development projects as part of its ‘Build Better More’ infrastructure agenda. With Japanese aid, construction has also begun on the first subway line in the Philippines.

MALAYSIA, INDONESIA, ISRAEL
Israeli foodtech companies seeking to expand to Muslim-majority markets of Malaysia and Indonesia
(19 July 2023) Israeli foodtech companies are seeking to expand into the Muslim-majority markets of Malaysia and Indonesia, despite the lack of political recognition by both countries of Israel. Israeli foodtech companies are planning halal-certified alternative protein products for practicing Muslims within ASEAN. In the global alternative proteins market, Israel is the biggest recipient of investment after the U.S. and tops other markets such as China and Singapore. From 2020 to 2022, Israel drew in US$1.19 billion in alternative protein-related investments. Market research specialist GWI estimates there are 29.8 million potential consumers of cultured and artificial meat within Southeast Asia. Many Israeli foodtech companies have come to view Singapore as a springboard to the wider ASEAN market.

MALAYSIA
Overall trade value contracts by 16.3% year-on-year in June 2023
(20 July 2023) Malaysia’s overall trade value contracted by 16.3% year-on-year in June 2023 to US$48.90 billion, as the value of shipments exchanged with its major trading partners continued to drop. The decline in trade value was attributed to a 14.1% drop in exports to US$27.29 billion and an 18.9% contraction in imports to US$21.60 billion. Malaysia’s trade surplus in June 2023 rose by 11.3% year-on-year to US$5.68 billion. Export value was bolstered by strong demand for electrical and electronic (E&E) products, iron and steel products, metalliferous ores and metal scrap, transport equipment, and processed food. For the second quarter of 2023, trade value dropped by 11.3% year-on-year to US$141.58 billion.

SINGAPORE, INDIA 
Temasek looking for strategic partners as it seeks to deploy up to US$5 billion a year in India
(19 July 2023) Singaporean state investor Temasek Holdings Pte is seeking strategic partners as it looks to deploy between US$3 billion and US$5 billion a year in India. Temasek is planning on hiring another four or five investment professionals to bring its India team to more than 20 people. The company could deploy as much as US$10 billion to the country in three years, and the deployment could be through a mix of partnerships and more capital in public equities. Over the last five or six years, Temasek has been ramping up investments in India. The company is targeting banks, financial operations, healthcare, technology, and consumer sectors. About 60% of Temasek’s investments in India are direct stakes.

INDONESIA, INDIA
Indonesia and India seeking to settle bilateral transactions in local currencies and to link-up payments systems
(16 July 2023) Indonesia and India are seeking to settle bilateral transactions in local currencies and to link up their fast payment systems to facilitate cross-border funds transfers. India’s Finance Minister Nirmala Sitharaman and her Indonesian counterpart Sri Mulyani Indrawati discussed the proposals ahead of recent meetings among the Group of Twenty (G20) countries in India, with formalities yet to be complete. Idrawati stated that the meeting sought to strengthen bilateral trade and investment. India has so far linked its fast payments system with Singapore, and is currently negotiating with several others, including Japan and France, to likewise facilitate fast cross-border transactions.

ASEAN, INDIA
India emerging as key growth market for Southeast Asia’s travel and tourism sector
(17 July 2023) India is emerging as a key growth market for Southeast Asia’s travel and tourism sector. From airlines to hospitality chains, companies are seeking to tap into India’s burgeoning middle class. The travel and tourism industry contributed about 12% of the region’s GDP before the COVID-19 pandemic, and currently employs more than 40 million people. The influx of Indian tourists has helped make up for the weak recovery of Chinese tourism to Southeast Asia, with the number of Chinese visitors in May 2023 at least 60% lower than the same month in 2019. As of June 2023, seat capacity on scheduled flights between China and Southeast Asia was 57% below pre-COVID-19 levels, while flights from India to the region had recovered to about 90%. In general, Indians can get visas much more easily from Southeast Asian countries than they can from European countries or the United States.

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