ASEAN will become fourth largest economy by 2030, says UOB

The GDP of the 10-member countries is likely to expand to US$8.1 trillion in 2030 from the current US$2.5 trillion.

A logo of the United Overseas Bank Limited (UOB) Reuters

United Overseas Bank (UOB) has recognised the potential economic growth of the ASEAN region and cited that its combined gross domestic product of the 10-member countries is likely to expand to US$8.1 trillion in 2030 from the current US$2.5 trillion.The figures will make ASEAN the fourth largest economy in the world.

The estimate was supported by UOB's ability to facilitate clients to business and investment within the Southeast Asia (SEA) which amounted to S$27 billion, which is double the amount recorded from the previous year.

UOB FDI advisory unit managing director and head, Sam Cheong, said that SEA is an attractive investment destination with opportunities driven by region's rapid urbanisation, major infrastructure projects, rising cost of income and increasing consumption create.

"The potential of a more integrated region through the ASEAN Economic Community is also proving attractive to those companies establishing their presence in our region," Cheong said in a statement on Thursday.

He said many companies choose Singapore as their regional headquarters before penetrating into other markets.

"We are seeing more investment flowing directly into Indonesia, Malaysia, and Myanmar, driven by the young population and the opportunities arising from the increased consumption," Cheong added.

Noting the long-term positive outlook for the ASEAN region, he, however, said that there are challenges when investing in the region. Cheong said the cultural diversity can be challenging for companies as each market possess its own business and cultural practices.

UOB was the first bank in Singapore to establish an FDI Advisory Unit as a service to provide business with a one-stop shop dedicated to access inter and intra-regional opportunities.The unit has expanded across nine FDI Centres, including Malaysia in 2013. Other countries where UOB is located are: China, Hong Kong, India, Indonesia, Myanmar, Singapore, Thailand, and Vietnam.