Citi highlights Southeast Asia’s FDI allure

Citi anticipates positive foreign capital flows to Southeast Asia, driven by the region’s high economic growth potential and increased geopolitical risk.
According to Amol Gupte, head of Asia South Cluster and Banking at Citi, the robust economic outlook of Southeast Asia coupled with heightened US-China tensions are key drivers of foreign direct investment (FDI) in the region.
Amid rising geopolitical risks, offshore investors are moving their production bases to Southeast Asian countries, which have strong and diverse manufacturing industries, he said.
REGION HOLDS PROMISE
According to Mr Gupte, Thailand stands out, particularly in the automotive sector, where the shift from internal combustion engine vehicles to electric vehicles (EVs) presents significant opportunities.
Electronics and semiconductors are also emerging as attractive sectors for FDI.
Indonesia, with its abundant natural resources, leads the world in nickel production, while Vietnam boasts a broad-based manufacturing sector.
“These countries are exceptional options for FDI and the global supply chain. In terms of geopolitics, I don’t see any other region benefiting as much as Southeast Asia,” Mr Gupte said in an exclusive interview with the Bangkok Post.
Moreover, he said countries in the region have embraced new and youthful political leadership, especially in Thailand, Singapore, Indonesia and Vietnam.
These new governments are primarily focused on attracting FDI to bolster their economic growth, while prioritising measures to enhance the ease of doing business and facilitate FDI.
Competitive production and labour costs in the region are additional draws for investors. Although Thailand’s labour costs may not be as low as some regional peers, the country compensates with a skilled workforce, especially in the auto industry, said Mr Gupte.
Citi projects Thailand’s GDP growth at 2.5% in 2024, the lowest among Asean nations.
Vietnam is expected to lead with a growth rate of 6.3%, followed by the Philippines (6%), Malaysia (5.2%), Indonesia (5%) and Singapore (2.8%).
For 2025, Citi predicts Thai GDP growth reaching 3.2%. Vietnam’s growth is forecast at 6.5%, followed by the Philippines (6%), Indonesia (5.1%), Malaysia (5%) and Singapore (3%).
Citi sees Thailand as an important market and is looking to grow its institutional banking business.
“We have strong leadership in place with a Thai head, Narumon Chivangkur, who has 28 years at Citi,” said Mr Gupte.
Thailand is projected to have the second-largest digital economy in Asean, with gross merchandise value growth from US$36 billion in 2023 to $100-165 billion in 2030, or 25% of GDP, according to Citi.
Thailand’s digital competitiveness ranking in 2023 climbed five places to 35th, and the country targets the top 30 by 2026.
VAST NETWORK
Citi is leveraging its tailored technology platform solutions, offering the world-class cloud-based solution “Citi Express” to support clients’ e-commerce growth in Thailand.
Thailand is the top automotive manufacturer in Southeast Asia and financing the EV industry provides opportunities.
As mid-market companies seek to expand offshore, Citi can leverage its global network in more than 90 countries for clients.
For example, the company is speaking to clients about lending in South Africa and helping clients find cash management solutions in Bangladesh, said Mr Gupte.
Although Thailand’s post-pandemic GDP growth lags its regional peers, he said the country’s strength in the service sector, particularly in tourism, gives it strong potential for long-term growth.
Thailand also excels in the hospitality, healthcare and wellness industries, enhancing its economic prospects.
In addition, the country’s blend of manufacturing, agriculture and services has been adapted to fit the country’s evolving economy, said Mr Gupte.
The development of modern industries is another key factor attracting FDI and driving long-term economic expansion, he said.
With its extensive global network and expertise in cross-border banking solutions, Citi is well-positioned to support both inbound and outbound investments in Thailand. Cross-border banking services remain a focus for the bank, said Mr Gupte.
Citi, a US-based multinational financial institution, operates in 95 countries. Its cross-border banking services include foreign exchange management, covering 16 currencies. Citi’s digital banking features are designed to facilitate customers’ cross-border investments.
Mr Gupte oversees Citi’s operations in India, Bangladesh, Sri Lanka, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.