The Economic Outlook for Southeast Asia, China and India is a biannual publication on Asia’s regional economic growth, development and regional integration processes. It focuses on the economic conditions of the Association of Southeast Asian Nations (ASEAN) member countries (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam) and two large economies in the region, China and India. This publication evolved from the Southeast Asian Economic Outlook. Beginning with the first release of the Update in June 2016, the Outlook has become a biannual publication, with the main report released in the fall and its update released the following spring.

The 2019 edition of the Economic Outlook for Southeast Asia, China and India covers four main topics related to Emerging Asia: the regional economic outlook to 2023 (Chapter 1), towards smart urban transportation – the thematic focus of this edition (Chapter 2), country notes on key structural policy challenges (Chapter 3), and recent developments in regional integration (Chapter 4).

Gross domestic product (GDP) growth in Emerging Asia – Southeast Asia, China and India – has held up in 2018 despite external and domestic headwinds. In Southeast Asia, economic expansion rates have remained robust although the trends by country have somewhat diverged. While China’s economic growth is gradually slowing, GDP growth in India is expected to remain robust. Overall, the resilient private consumption story in the region continues, underpinned by stability in labour market and overseas transfers in some cases. Growth in gross exports has also withstood trade policy uncertainties rather well. Several monetary authorities in the region have raised interest rates to address monetary normalisation in advanced economies as well as price and exchange rate pressures. These moves have been accompanied by policies to provide liquidity to support growth. Fiscal positions in the region are generally stable.

Gross domestic product (GDP) growth in Emerging Asia – Southeast Asia, China and India – held up in 2018 despite external and domestic headwinds. In Southeast Asia, economic expansion rates remained robust in general, although the trends by country diverged somewhat. While China’s economic growth is gradually slowing, GDP growth in India is expected to remain robust. As for the region’s private consumption story, resilience continued, underpinned by stability in labour markets and overseas transfers in some cases. Growth in gross exports likewise withstood trade policy uncertainties rather well. Several monetary authorities in the region have raised interest rates to address monetary normalisation of advanced economies as well as price and exchange rate pressures. These moves have been accompanied by policies to provide liquidity to support growth. Fiscal positions in the region are generally stable. The main risks to growth are related to the financial technologies (Fintech), constraints to international trade and the management of natural disaster risks.

Transportation challenges, particularly traffic congestion, can be a serious constraint to urban economies, in addition to creating a number of social and environmental problems. As a result of rapid growth in population and the use of private motor vehicles, congestion is a common issue in many Emerging Asian cities. Policy options to be considered in improving urban transportation systems include the development of efficient and accessible public transportation systems; implementing pricing and other mechanisms for affecting vehicle ownership and use; reforming land use and urban planning; adopting new modes of work, including teleworking and flexible hours; and incorporating new technologies, such as through smart city initiatives, in managing transportation challenges.

Domestic structural reforms are needed to maintain robust growth. This chapter discusses the key policy areas for reform in each of the ASEAN member countries, China and India. The structural policy country notes include topics on ageing population, accessibility of education, SME development and industrial development, among others. Examples from the OECD and other countries in the region are also included where relevant. Apart from policy recommendations, updates and progress on policy areas covered by previous editions of the Outlook are also highlighted in this chapter.

Regional integration is needed to boost productivity, improve investment, increase resilience and tackle shared challenges. ASEAN has been central to many of the efforts on regional integration involving Emerging Asia countries. Increasingly, regional integration in Emerging Asia is taking place through broader frameworks: ASEAN+3 and ASEAN+6. Gradual progress is being made towards regional goals regarding trade in goods, trade in services; investment and capital market liberalisation; competition and consumer protection; intellectual property; infrastructure and connectivity; SMEs; food, agriculture and forestry; tourism; human and social development; energy; and the Initiative for ASEAN Integration.