• Report projects SEA-6 to grow 4.8% annually in 2026 – 2035, although economies differ markedly in resilience and their ability to capture upside
• Singapore's trusted-hub role positions it to connect regional capital, businesses and opportunities
• Institutional resilience, stronger energy systems and the AI dividend identified as priorities for the next decade

Singapore, Regional, 16 Sep 2026 – Southeast Asia's six largest economies (SEA-6: Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam) are projected to grow by an average of 4.8% annually between 2026 and 2035. Growth will be supported by sustained foreign investment and capital formation, continued industrialization and infrastructure development, as well as productivity gains from technology adoption. Resilient domestic consumption and favorable demographics in several of the larger economies will provide further impetus.

Yet their growth paths are diverging as differing levels in institutional strength, energy security and technological readiness determine their ability to withstand shocks and capture new opportunities, according to “From Tailwinds to Trade-Offs: Southeast Asia Outlook 2026 – 2035”.

Now in its third edition, the 10-year outlook report (2026 – 2035) draws on the combined economic, business and public-policy perspectives of Bain & Company, DBS Bank and Vriens & Partners. It finds that global conditions will set the boundaries for the region's growth over the next decade, while near-term policy choices will determine how individual economies perform within them. Countries will need to pursue different domestic priorities, but their prospects remain closely connected through trade, investment, supply chains, energy and technology.

Several findings stand out:

• The report’s base case forecast for 2026 to 2035 remains broadly intact at 4.8%. For comparison, the 2024 report forecast called for 5.1% over the 2024 to 2034 period.
• Growth trajectories are diverging: Vietnam remains the regional growth leader, while Thailand lags its counterparts.
• The range of possible outcomes has widened. Indonesia, the Philippines and Thailand are most exposed in a downside scenario. Meanwhile, Malaysia, Singapore and Vietnam capture disproportionate upside under more favorable conditions.
• Foreign direct investment (FDI) has surged and partner mix has shifted, reflecting global supply chain realignment.
• Singapore remains the region’s most resilient economy, supported by its safe-haven status, deep markets, fiscal buffers and trusted hub credibility. Its position as a regional center for capital also facilitates investment and business opportunities across Southeast Asia.
• Near-term policy choices will be decisive, with the current environment placing greater weight on three priorities: strengthening institutional resilience, fortifying energy systems and capturing the AI dividend.

Headline growth holds firm as regional trajectories diverge

The SEA-6 economies – Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam – grew by an average of 5.1% in 2024 and 2025, in line with the previous edition's regional projection. This durability is notable against a backdrop of intensifying US-China rivalry, rising protectionism and disruptive technology shifts.

The aggregate result, however, masks a sharp divergence. Vietnam grew by 7.5% over the two-year period, while Thailand recorded 2.7%. Singapore, Malaysia and Vietnam outperformed the regional average, supported by AI-linked semiconductor demand, manufacturing exports and investment momentum. Indonesia fell short of the earlier forecast amid institutional and execution constraints, while the Philippines was impeded by weaker investment and public-sector execution.

Investments and trade create opportunity – and exposure

Southeast Asia’s growth and opportunities remain linked to external demand. Net FDI inflows into the SEA-6 rose 25% in 2025 even as inflows into China contracted by 34% but investment has become increasingly concentrated in a small number of hubs and sectors. Trade volume in 2016 to 2025 was equivalent to about 89% of regional GDP, more than twice the global average.

The report cautions that recent export gains, driven largely by electronics and AI infrastructure, have yet to translate into broad-based productivity improvements.

Singapore’s trusted hub role connects capital with regional opportunity

Singapore is the region’s most resilient economy, supported by its safe-haven status, deep markets, fiscal buffers and trusted hub credibility. It attracts more than 60% of the region's FDI and is ASEAN's regional capital hub. It is also the largest source of FDI into Indonesia, Malaysia, Thailand and Vietnam.

This two-way role enables Singapore to connect global capital and capabilities with businesses and opportunities across Southeast Asia, reinforcing the interdependence between its success and that of the wider region. Its key constraints are energy dependence and demographics; sustaining growth will require continued talent attraction and the broad diffusion of AI-led productivity gains across the economy.

Three priorities to accelerate growth

The core growth levers identified in the 2024 outlook remain relevant, but the global environment has elevated three priorities:

• Strengthen institutional resilience: Governance and the rule of law, fiscal stability and deeper capital markets are becoming decisive differentiators for investor confidence, capital retention and policy execution.
• Fortify energy systems: Bankable renewable energy assets are prerequisites for attracting high-quality investments, not merely climate objectives. Grid capability and reliability are needed to support industrial base expansion and power-intensive AI infrastructure, while energy import sources must be diversified to mitigate exposure to external supply shocks.
• Capture the AI dividend: Economic returns will accrue to countries that move beyond pilots to enterprise-scale adoption, supported by credible data governance, compute infrastructure and workforce development.

Divergence raises the stakes for regional cooperation

Domestic policy choices will ultimately determine whether each economy approaches the ceiling or floor of its potential. Yet no Southeast Asian economy can insulate itself from a more fragmented world. The region's high trade intensity, reliance on FDI, interconnected supply chains and exposure to energy and technology shifts make collective resilience increasingly important.

As Singapore prepares to assume the ASEAN Chairmanship in 2027, the findings underline the importance of keeping the region open, connected and investable. Southeast Asia's 4.8% baseline forecast is achievable, but not automatic. Performance over the next two to three years will determine whether countries convert today's tailwinds into durable advantages and whether the region strengthens its collective position in the global economy.