Economists have revised up next year’s growth projections for Malaysia and Indonesia, citing robust domestic demand, according to a fresh survey compiled by the Japan Center for Economic Research (JCER) and Nikkei, underscoring the Southeast Asian economies’ resilience amid a global downturn.

The JCER and Nikkei conducted the latest quarterly consensus survey from Nov 25 to Dec 15, receiving 34 answers from economists and analysts in the six biggest Asean economies – Indonesia, Malaysia, the Philippines, Singapore and Thailand – and India. 

Nevertheless, Malaysia’s GDP growth rate was upgraded by 0.2 point to 4.2% for 2023. In addition, its growth rate projection for 2022 was upgraded to 8.5% from the previous 6.9%, backed by domestic consumption and business activities upon recovery from the Covid-19 pandemic.“Looking ahead to 2023, Malaysia’s robust growth this year should provide a solid foundation for further growth in a difficult 2023,” said Sedek Jantan, head of wealth research and advisory at UOB Kay Hian Wealth Advisors.

Kenanga Investment Bank head of economic research Wan Suhaimie Saidie said, “GDP growth forecast is expected to remain intact on the back of resilient domestic demand, aided by various policy supports and increased tourist arrivals.”

Likewise, Indonesia’s figure for 2023 has been revised to 5% from 4.9%. “Consumption and high commodity prices supported economic growth in 2022 and will likely do so in 2023,” said Umar Juoro, senior fellow of the Habibie Center in Indonesia.

Meanwhile, next year’s growth projections for the Philippines, Singapore and Thailand have been lowered by 0.1 to 0.2 point to 5.3%, 2.1% and 3.5%, respectively. Economists pointed out that the weakening global economy would weigh on exports for these countries.“Because the Thai economy is highly dependent on exports to China and tourists from China, the economic slowdown there will have a strong impact on Thailand,” said Lalita Thienprasiddhi, senior researcher at Kasikorn Research Center.

“China’s outbound travel may continue to be restrictive, and thus we do not expect mass tourism from China to Thailand next year.”

Overall, the five Southeast Asian countries combined are now expected to grow 4.3% next year, unchanged from the previous survey. That marks a slowdown from a projected 5.3% growth for 2022.

As far as India is concerned, the growth rate is expected to slow to 5.6% in fiscal 2023 – which starts in April – a downward revision of 0.4 point from the previous survey, also a slowdown from the projected 6.8% growth in 2022. Economists pointed out that slowing growth in the global economy, especially in the US, will impact India.

The survey found that the US monetary policy and the world’s No. 1 economy’s slowdown are among the most significant risks for most economies in the coming 12 months, while China’s slowdown topped other risk factors in Malaysia and Thailand.

Inflation was among the top risks in Indonesia and the Philippines, although consumer inflation rates in the six economies are expected to ease next year, projected between 2.8% and 5.6%, versus an expected range of 3.3% to 6.8% in 2022.

As such, economists say most central banks will end rate hikes in 2023, with the Philippines expected to cut rates in the third quarter of the year.

“Bangko Sentral ng Pilipinas [is expected] to follow Fed moves in 2023,” said Nicholas Mapa, senior economist at ING Bank Philippines, referring to the country’s central bank.