ASEAN-6 Economic Growth Decelerates in Q4 2022
The South East Asia Iron & Steel Institute reports strong economic growth for ASEAN-6 countries (Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam) in 2022 despite multiple challenges, including the Ukraine war, volatile commodity prices, high inflation, and increasing interest rates. The GDP growth for all ASEAN-6 countries exceeded or matched pre COVID year 2019 figures, indicating a return to a growth path. The quarterly results show a positive trend for the economies in 2022. In Q4 2022, Indonesia's GDP growth was 5.3%, Malaysia's was 8.7%, the Philippines' was 7.6%, Singapore's was 3.6%, Thailand's was 2.6%, and Vietnam's was 8%.
While ASEAN-6 countries showed strong economic growth throughout 2022, the Oct-Dec quarter revealed a slowdown in some economies. Indonesia experienced a slight dip to 5% in Q4 from 5.7% in Q3, while Malaysia also saw a slowdown to 7% from a remarkable 14.2% in the previous quarter. The Philippines saw a modest increase to 7.2% from 7.6%, while Singapore experienced a significant decline to 2.1% from 4%. Thailand also experienced a slowdown to 1.4% from 4.6%. Vietnam, which had shown robust growth, saw a notable slowdown to 5.9% from 13.7%.
The growth in Q4 2022 was primarily driven by several factors, including an increase in household consumption by 4.4%, which was aided by the opening up of the economy. Investments also increased by 1.1%, mainly in machinery & equipment (22.4%) and vehicles (10.3%), as well as investments in buildings (0.9%). Exports also saw a significant boost of 14.9%, particularly in services (56.4%) and non-oil and gas goods (16.3%), supported by high commodity prices. However, government consumption declined by 4.8%, mainly due to reduced spending on health support compared to the previous year. In the construction sector, there was a slight increase in growth at 1.6% in Q4 2022, compared to the 0.6% growth registered in Q3 2022. In the manufacturing industry, there was a growth of 5.6%, and the steel-related manufacturing industry also expanded. The base metals industry grew by 15.1%, followed by machinery & equipment (7.0%) and transportation equipment (11.0%). The mining sector also expanded by 6.5%, led by expansion in non-oil & gas sectors. Coal & lignite mining expanded 14.8%, while metal ore mining expanded 16.2% in Q4 2022.
In Q4 2022, Malaysia's economy grew 7.0%, primarily due to increased consumption as containment measures were eased. Private consumption, accounting for over half of GDP, grew by 7.4%, and government consumption also increased by 2.4%. Gross fixed capital formation grew 8.8%, with private investment accounting for the majority at 67.1%. Exports and imports continued to grow, and construction and mining sectors expanded.
In Q4 2022, the Philippine economy grew by 7.2%, with household consumption contributing the most at 7.0%, followed by government consumption at 3.3%, and investments at 5.9%. Exports grew by 14.6%, while imports grew by 5.9%. All economic sectors, except agriculture, forestry, and fishing, expanded during the quarter. The construction sector grew by 6.3%, while the manufacturing sector expanded by 4.2%, with the transport equipment cluster leading the growth at 10.9%. The mining sector grew by 1.7%, significantly slower than the previous quarter.
The Singaporean economy grew by 2.1% in Q4 2022, with all industry sectors expanding except for manufacturing, which contracted by 2.6%. The construction sector grew by 10.0%, driven by an increase in private and public sector construction works. Construction demand increased by 8.1%, and certified progress payments grew by 17.7%. The transport engineering and precision engineering clusters were the only ones to show growth in manufacturing, with output in the aerospace segment rising by 24.4%.
Thailand's GDP grew by 1.4% YoY in Q4 2022, compared to a growth of 4.6% the previous quarter. Private consumption expanded by 5.7%, while government consumption contracted by 8.0%. Fixed investments grew by 3.9%, but exports and imports contracted. The construction sector expanded by 2.6%, while the manufacturing sector contracted by 4.9%. The light industry declined by 2.3%, the raw material industry declined by 7.3%, the capital and technology industry declined by 4.4%, and the mining and quarrying sector declined by 6.9%.
Vietnam's GDP grew by 5.9% YoY in Q4 2022, down from 13.7% in the previous quarter, marking the fifth consecutive quarter of growth after the Q3 2021 contraction. Construction activities grew by 6.7% YoY in Q4 2022, while the manufacturing sector expanded by 3.0% YoY. The mining sector declined by 5.1%, led mainly by a contraction in coal and lignite mining.
The ASEAN-6 countries are optimistic about economic growth in 2022, with China's growth expected to boost the region. However, the outlook for Western economies remains weak, and escalating geopolitical tensions and high interest rates will continue to impact ASEAN countries. Indonesia is forecast to grow at 5.3%, while Malaysia is expected to grow at 8.7% in 2022, followed by the Philippines at 7.6%, Vietnam at 8%, Singapore at 3.6%, and Thailand at 2.6%. In 2023, growth is expected to slow down for most countries, with Malaysia projected to grow at 4.0-5.0%, the Philippines at 6.0-7.0%, Singapore at 0.5-2.5%, Thailand at 2.7-3.7%, and Vietnam at 6.5%.