ASEAN economy projected to grow 4.5% as trade and investment remain resilient

Southeast Asia's economy is expected to grow 4.5% in 2026, according to ASEAN economic ministers, as the region continues to attract investment and maintain strong manufacturing and export activity despite a more uncertain global environment.

The projection was highlighted following the 58th ASEAN Economic Ministers' Meeting in Manila on 19 September, where ministers assessed the region's economic position against geopolitical tensions, changing trade conditions and uncertainty in the global economy. ASEAN said its economy grew 4.9% in 2025 and is expected to remain well above projected global growth of 3% this year.

Manufacturing, exports, investment and domestic demand are continuing to support the region. That matters for businesses operating across Southeast Asia, where supply chains have increasingly become an important part of regional growth. The ministers described the economy as resilient despite uncertainty linked to the Middle East crisis and wider geopolitical pressures.

The region's trade figures also show the scale of the opportunity. ASEAN merchandise trade expanded 13.7% to $4.4 trillion in 2025, while foreign direct investment increased by 10.1% to $245.7 billion. Services trade also grew during the year, highlighting the importance of both traditional industries and newer digital and service-based businesses.

Digital business is another area receiving greater attention. ASEAN ministers are preparing for the signing of the ASEAN Digital Economy Framework Agreement, which is intended to support a more integrated regional digital economy and make cross-border transactions easier. The agreement is also expected to create more opportunities for smaller businesses operating across ASEAN markets.

Semiconductors are also becoming a strategic priority. Indonesia has called for stronger regional cooperation through an ASEAN Semiconductor Roadmap, with the aim of building a more connected semiconductor ecosystem across Southeast Asia. The initiative reflects the region's wider push to strengthen its position in advanced manufacturing and technology supply chains.

At the same time, ASEAN is working to maintain strong trading relationships with major partners. Ministers met with Japan and the United States during the week, with ASEAN-Japan two-way merchandise trade reaching $245.4 billion in 2025 and Japanese investment into ASEAN reaching $9.5 billion.

For founders and investors, the bigger picture is that Southeast Asia continues to combine economic growth, manufacturing capacity, rising investment and expanding digital markets. The challenge will be turning those regional advantages into easier cross-border opportunities for businesses.

Is Southeast Asia becoming a more important market or operating base for your business?

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