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14 Feb 2024

International Economy

Although the overall FDI inflow into ASEAN declined in 2023, FDI in the industrial sector of Indonesia and Vietnam has continued to increase. (Business Brief No.4035)


  • Since the start of the trade war between the US and China, Indonesia and Vietnam have been major beneficiaries of the relocation of production bases from China, in comparison to Malaysia and Thailand.
  • FDI in ASEAN declined in 2023 as the investment capacity of foreign companies has been weakened by the global economic slowdown and rising interest rates. However, for Indonesia and Vietnam, FDI in the manufacturing sector has risen steadily . In the case of Thailand, the decline in FDI is attributable to the closure of foreign businesses, including divestment of ExxonMobil’s stakes in Esso Thailand.  Meanwhile, FDI in new S-curve industries increased in 2023.
  • KResearch views that that Vietnam and Indonesia remain key production hubs for attracting FDI in manufacturing sector of ASEAN. As Thailand still has the potential to attract FDI in new S-curve industries, the country should expedite the implementation of policies that are more conducive to investment.

International Economy