The economies of south-east Asia are looking forward to a healthy growth in 2024 of between 3 per cent and 6 per cent. This increase should help lower the steadily rising debt-to-GDP ratio seen in the region, without requiring huge reductions in borrowing by governments and corporates.
While most governments appear to have survived the Covid-19 pandemic with their sovereign ratings intact, the region remains highly vulnerable to geopolitical risks. Meanwhile, corporate debt, high by global standards, is primarily held by large conglomerates which can expect favourable terms from the region’s still-robust banking systems. However, this comes at the price of less lending to small to medium-sized enterprises, which were hardest hit by the pandemic.
