Bain forecasts Southeast Asian economy to grow 4%-5% annually over next 10 years, with Vietnam leading the charge at projected growth of 5%-7%; SE Asia's largest trading relationships are with China, and region benefits most from a growing Chinese economy

Sample article from our Housing & Economy

November 18, 2022 (press release) –

The “traditional” drivers of strong Southeast Asia growth – modestly pro-growth government policies, stable macroeconomic conditions and healthy demographics – are being turbocharged by a vibrant, tech-enabled entrepreneurial sector and a “China dividend” that goes well beyond MNC’s diversifying their supply chains

Singapore, 18 October 2022 – The Southeast Asian economy is forecasted to grow by 4-5% annually over the next 10 years, with Vietnam leading the charge at a projected growth of 5-7%. While many economists have correctly focused on the pro-growth policies, stable macroeconomics and healthy demographics of Southeast Asia, they are often missing two critical sources of additional growth: 1) the growing impact of tech-enabled entrepreneurs on investment, productivity and economic inclusion and 2) that SE Asia’s largest trading relationships are with China; as China grows SE Asia grows. Contrary to conventional wisdom that SE Asia benefits most from businesses diversifying away from China, SE Asia benefits most from a growing Chinese economy. These are among the findings from a new report by Bain & Company and Monk’s Hill Angsana Council, “Southeast Asia’s Pursuit of the Emerging Markets Growth : How four factors could step up Southeast Asian growth”.

Since 1991, SEA has experienced strong and steady growth, with per capita income rising 2.5x from US$1,900 to US$4,700 in 2020. Contributing factors include stable government policies, surging entrepreneurial activity, favourable demographics, and a relatively benign international environment.
SEA’s GDP per capita income has been growing and could return to leading emerging markets growth on the back of the four factors below:

  1. Robust traditional growth policies
  2. A vibrant ecosystem of tech-enabled disruptors (TEDs)
  3. Attractive demographics with a growing working and middle class
  4. Taking a neutral stance amidst geopolitical winds

Our projections for growth in Southeast Asia foresee a modest uptick for all major Southeast Asian countries except Thailand, which should be interpreted as a “rosy scenario” relative to the growth headwinds faced by Europe, Japan, China and emerging regions like Latin America and Eastern Europe.

Robust traditional growth policies
SEA countries have made steady progress towards improving several of the 7 traditional growth drivers Bain has defined in the study.

  1. Improving the ease of doing business
  2. Enabling healthy competition
  3. Facilitating investment 
  4. Strengthening government and reducing corruption
  5. Raising education levels and promoting re-skilling
  6. Improving infrastructure
  7. Increasing macroeconomic and social stability

Probably the most noticeable improvement in Southeast is the marked increase in macroeconomic stability since the 1997 Asia Crisis. This reduction in risk will benefit Southeast Asia during this time of global headwinds.

Vibrant ecosystem of tech-enabled disruptors (TEDs)
Today, the greatest force of progress in most developing countries are tech-enabled disruptors or TEDs. The TEDs are directly and indirectly impacting six of the seven traditional growth drivers by promoting business creation, enabling healthy competition, raising investment, strengthening e-government, improving education and productivity levels, and improving infrastructure.
Pressure from TEDs is forcing traditional family-controlled or “national champions” to increase investment levels and accelerate innovation or face irrelevance in the coming decade. We are pleased to note that most Southeast Asian governments actively nurture the growth of TEDs with beneficial policies, regulations, and infrastructure building in areas critical to tech-enabled disruption.
The full report analyses four sectors - aviation, finance, logistics, and super-apps - that highlight the disruptive impact of TEDs and how they will contribute to higher growth rates in SEA.

Attractive demographics with a growing working and middle class
One advantage of SEA is the demographic dividend expected from the size and growth of its working-age population. In 2022, China’s population tipped into absolute decline. SEA has the largest cohort of children relative to total population among the emerging regions under review. Middle-class consumerism is expected to rise given a youthful population that needs to spend on lifestyle, education, housing, and other needs well into the 2030s, while Latin America and Eastern Europe’s populations will begin to contract. SEA has seen consumer growth in line with GDP growth at an attractive and sustainable rate.


Remaining neutral amidst geopolitical winds
SEA has traditionally traded peacefully with various “great civilizations” – China, Arabia, Persia, India, Europe – while balancing their competing demands. SEA can look forward to maintaining this neutral status even in this complex geopolitical environment.
SEA also benefits from the rise of China in two distinct ways: as the largest market for SEA trade and as an important source of FDI as non-Chinese and Chinese companies diversify or shift supply chains away from China.
 
Charles Ormiston, Founding Partner, Bain & Company, Southeast Asia, said: “Growth forecasts are notoriously difficult due to a myriad of factors that can affect projections based purely on historical performance. This report represents our informed perspectives on the future of Southeast Asia, which is gleaned via a rigorous methodology for looking at past performance combined with our judgement on how underlying changes in the business, economic, social, and political realm are likely to impact growth. We remain optimistic about Southeast Asia’s continued growth in the face of global instability and that it maintains the possibility of out-growing other emerging regions in the world over the next decade.”


Peng T. Ong, Co-Founder and Managing Partner, Monk's Hill Ventures said: We have had a very productive collaboration with Bain & Company producing this report. Monk’s Hill brings deep experience working with the tech-enabled disruptors highlighted in this report, as well as how government policies impact the opportunities that entrepreneurs can exploit.   Bain has enormous access to data, research and more than 30 years on the ground in Southeast Asia.   The members of the Angsana Council, which includes former Minister George Yeo (Singapore) and Gita Wirjawan (Indonesia) are well known experts in government policy, business and economics.  Together the Angsana Council can do something few institutions can do – combine data and analysis with deep experience across every business and policy sector in the region.

Editor’s note: For more information or to arrange an interview with Mr. Charles Ormiston, please contact Tay Yan Xin at yan-xin.tay@bain.com or +65 6228 5019 .

About Bain & Company 

Bain & Company is a global consultancy that helps the world’s most ambitious change makers define the future. 

Across 64 cities in 39 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. Our 10-year commitment to invest more than $1 billion in pro bono services brings our talent, expertise, and insight to organizations tackling today’s urgent challenges in education, racial equity, social justice, economic development, and the environment. Since our founding in 1973, we have measured our success by the success of our clients, and we proudly maintain the highest level of client advocacy in the industry.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.

More from our Housing & Economy Coverage
See our dashboard in action - schedule an demo
Dan Rivard
Dan Rivard
- VP Market Development -

We offer built-to-order housing & economy coverage for our clients. Contact us for a free consultation.

About Us

We deliver market news & information relevant to your business.

We monitor all your market drivers.

We aggregate, curate, filter and map your specific needs.

We deliver the right information to the right person at the right time.

Our Contacts

1990 S Bundy Dr. Suite #380,
Los Angeles, CA 90025

+1 (310) 553 0008

About Cookies On This Site

We collect data, including through use of cookies and similar technology ("cookies") that enchance the online experience. By clicking "I agree", you agree to our cookies, agree to bound by our Terms of Use, and acknowledge our Privacy Policy. For more information on our data practices and how to exercise your privacy rights, please see our Privacy Policy.