Southeast Asia’s foreign direct investment inflows jumped 10% to a record US$244 billion in 2025. (Reuters pic)
SINGAPORE: Southeast Asia is a “strategic winner” from supply chain shifts and capital reallocation, highlighting the region’s resilience, according to United Overseas Bank Ltd (UOB).
Foreign direct investments (FDI) to the region jumped 10% to a record US$244 billion in 2025, according to a UOB analysis of the latest data from UN trade and development.
The increase outpaced the 6% global growth and places Southeast Asia’s total investment capture near Europe’s.
Singapore was the second-most attractive FDI destination after the US, attracting US$151 billion in inflows.
Malaysia had the strongest expansion at 51%, supported primarily by investments in digital infrastructure.
Thailand and Vietnam also posted gains while FDI in Indonesia fell 14%.
“At first glance, Indonesia’s decline in FDI inflows may raise concerns,” UOB economists Enrico Tanuwidjaja and Vincentius Ming Shen wrote in the report this week.
“Instead it appears to mask continued long-term commitments by global investors,” they added.
Indonesia has led the region in corporate acquisitions, industrial developments as well as drawing the largest share of large-scale infrastructure financing, according to the economists.
“Although headline FDI inflows showed divergent trends across Asean economies, the region continues to benefit from strong structural investment drivers,” the bank said.
These drivers include accelerating focus on digital infrastructure and green industries.
“Asean’s investment gains come as manufacturers continue to diversify some lower-value consumer goods and electronic assembly beyond China,” Oxford Economics economists Alexandra Hermann and Artie Lam said in June 29 report.
