Southeast Asia growth resilient as AI boom offsets risks: Moody's

Southeast Asia's economy has demonstrated greater resilience than anticipated this year, according to Moody's Analytics. The AI-driven surge in exports and investment is boosting regional growth, despite mounting external threats. The agency's September report suggests growth will slow to 4.8% this year and 4.6% in 2027, down from 4.9% in 2025.

While the initial rush of orders has stabilized, the AI boom is still fueling expansion, particularly through investments in data centers and electronics exports. Most ASEAN economies are outperforming expectations when compared to earlier forecasts, primarily due to the AI-driven boom. However, the region faces growing risks from persistently high US tariffs, expected to remain elevated through 2028.

Many Southeast Asian tech exporters, such as Singapore, Malaysia, and Vietnam, are shielded from higher effective tariffs by a specific exemption for semiconductor chips, but this may soon be reconsidered.