ASEAN has solidified its position as a leading destination for foreign direct investment (FDI), with inflows reaching $225b in 2024, marking the second highest in its history. Singapore emerged as the largest recipient within ASEAN, attracting a record $143b, a 6% increase from the previous year. This is due to its status as a regional financial centre and its appeal in terms of political stability and connectivity.
ASEAN’s total represents a nearly 10% year-on-year increase, as reported in the latest World Investment Report by UNCTAD. The growth in ASEAN’s FDI outpaced the global increase of 3.7%, although it lagged behind the US and EU, which saw rises of 19.6% and 81.5%, respectively.
The surge in FDI is largely attributed to activities in supply chain–intensive manufacturing industries, reflecting multinational enterprises’ efforts to adapt to changing global trade dynamics.
Other ASEAN countries also experienced significant FDI growth. Indonesia saw a 13% increase to $24.2b, whilst Vietnam recorded its third consecutive year of record-high inflows, rising 9% to $20.2b. Malaysia and Thailand reported gains of 33% and 31%, respectively, as businesses pursued supply chain diversification and sustainability initiatives.
Despite global challenges, ASEAN’s strong fundamentals, such as a large youthful population and business-friendly policies, continue to attract investors. The establishment of the Johor-Singapore Special Economic Zone exemplifies cross-border collaboration, further boosting the region’s investment appeal. Looking forward, ASEAN is expected to remain a key driver of investment and trade, with positive prospects outlined in UOB’s report on the region’s outlook to 2030 and beyond.
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