Next-Generation Policies to Unleash ASEAN’s Full Potential

Kristalina Georgieva, Managing Director, International Monetary Fund

October 26, 2025

Thank you, Prime Minister Anwar. Your majesty, heads of state, ladies and gentlemen!

It is a great honor to be with you today and celebrate ASEAN's progress and tremendous promise. With a collective GDP of over 4 trillion dollars, ASEAN already is the world's 4th largest economy and is growing 25 percent faster than the global average.

Despite dramatic transformations in geopolitics, trade, technology, demography, climate, and the uncertainties that they create, the world-and ASEAN-have been remarkably resilient. Growth is holding up-globally we project it at 3.2 percent this year and 3.1 percent in 2026, and in ASEAN at 4.3 percent in both years. Admittedly, this falls short of historical trends, but it is better than we feared in April.

What are the sources of this resilience? One, improved policy fundamentals reflecting years of hard work. Two, private sector adaptability as evidenced by the trade frontloading, rapid supply chain reconfiguration, and surge in private investment in new technologies-AI in particular. Three, the majority of countries are continuing-so far-to trade under Most Favored Nation rules, but they are also deepening regional and bilateral cooperation, to cushion the impact of a more fragmented world.

All three factors matter tremendously for the future of ASEAN.

First, over the last decades ASEAN members have invested in strong policy fundamentals-independent central banks, inflation targeting, fiscal rules-and these investments are paying off. This work must continue-and it is an area where the IMF offers cross-country analysis and the transmission line of our bilateral, regional, and global economic assessments.

We also contribute to the region's financial stability through our collaboration with ASEAN+3 to strengthen and operationalize the mutual insurance against shocks provided by the enhanced Chiang Mai Initiative Multilateralisation (CMIM).

Second, private sector dynamism has played a major role in generating growth and jobs in ASEAN countries. Structural reforms to eliminate red tape, improve access to finance, and enhance skills of the labor force can help lift productivity and further strengthen economic resilience.

Third, ASEAN holds significant potential for next-generation policies to deepen trade, financial, and technological integration.

Today regional trade within ASEAN makes up slightly over 20 percent total trade, mostly in intermediate goods-compared to 60 percent, mostly final goods, in the EU. Removing trade barriers will help your economies grow faster. Our analysis shows that reducing nontariff barriers can boost ASEAN's GDP by 4.3 percent over the long run-equivalent to adding over one-third of Malaysia's current GDP to the bloc and creating some 4 million new jobs when coupled with smart labor market policies.

So, Yes to upgrading the ASEAN Trade in Goods Agreement. Yes to taking similar steps to free up trade in services. Yes to pairing this with stronger financial integration. Yes to transformative joint investments. And Yes to deeper sharing of technology, including in digital infrastructure and AI, where Singapore stands out as a global leader, and Malaysia, Thailand, and Indonesia are making notable progress. We are facilitating knowledge sharing on AI preparedness through peer-to-peer engagements in ASEAN and beyond.

And, excited by progress in the region, together with our Thai partners, we have chosen safe and inclusive digital finance as a key theme for our Annual Meetings in Bangkok next year.

I'll finish with this: the second half of the 20th century was marked by the rise of the EU, with its four freedoms-the freedom of movement of goods, services, capital, and labor. Let the first half of this century be remembered as ASEAN's time-a highly integrated, dynamic community of nations, working for the good of the region and for the good of the world.

Thank you.