Asean economies head into 2026 on a strong note

INVESTORS’ initial fears of a trade-tariff induced export and growth slowdown in 2025 proved unfounded. Instead, regional economies – particularly Malaysia and Singapore – registered strong growth and activity into year-end. Three factors resulted in this surprising positive turn for Asean economies.

Resilience and strength in regional exports

Evidence mounts that supply chain realignment is generating an increase in intra-regional trade and benefiting Asean exports. This momentum is particularly evident in regional economies plugged into the artificial intelligence (AI) and electronics supply chain.

For instance, Malaysia and Singapore both experienced a strong jump in exports, led by the electronics and semiconductor sector. Persistent global AI-related capital expenditure has created a clear “halo effect”, transmitting stronger demand across the entire electronics value chain as the AI replacement cycle intensifies.