Why investors are looking to Southeast Asia’s economies amid global tensions
The region’s young labour force, rapid urbanisation and emergence as a tech hotspot have made it attractive to investors, analysts say
Foreign money is flowing back into Southeast Asia, and analysts expect the region to remain a draw for global investors even as geopolitical tensions and domestic political risks cloud the outlook.
Emerging Southeast Asian markets recorded US$337 million of equity inflow in December last year, the highest monthly figure since September 2024, according to a Bloomberg report.
These economies include Indonesia, Malaysia, Thailand, Vietnam and the Philippines.
Analysts say the rebound points to sustained interest in the region, particularly through foreign direct investment (FDI), even as more volatile equity flows remain sensitive to global interest rates and geopolitical developments.
Southeast Asia is likely to remain one of the fastest-growing regions globally in terms of portfolio inflows, after countries proved their resilience amid geoeconomic tensions last year, according to Dong He, chief economist at the Asean+3 Macroeconomic Research Office (Amro).
Sasidaran Gopalan, a senior lecturer in economics at the Lee Kuan Yew School of Public Policy at National University of Singapore, agreed that the region was likely to continue attracting short-term investments.