(Bloomberg) — Growth in Southeast Asia’s internet economy is slowing after years of expansion, showing that even emerging digital markets aren’t immune to economic headwinds.
Online spending in the region will rise about 20% this year to $200 billion, research from Google, Temasek Holdings Pte and Bain & Co. showed, slowing from 38% a year earlier. The region’s internet economy is set to reach $330 billion by 2025, according to the report, down from a previous forecast of $363 billion.
This is the first time estimates have been revised downward in the companies’ annual report, which covers Singapore, Indonesia, Malaysia, Thailand, Vietnam, and the Philippines. Even as the region’s consumers are adopting mobile and online services at a rapid clip, they are curbing spending amid accelerating inflation and rising interest rates — just like their peers globally.
“After years of acceleration, digital adoption growth is normalising,” the companies said in a release. “The majority of digital players are now shifting priorities from new customer acquisition to deeper engagement with existing customers to increase usage and value.”
Southeast Asia, home to Alibaba Group Holding Ltd.’s Lazada and Sea Ltd.’s Shopee, will see a 16% increase in e-commerce gross merchandise value this year, slowing sharply from pandemic highs as consumers become more cautious. Online shopping is now forecast to hit $211 billion in 2025 versus a previous $234 billion prediction, making up 64% of the region’s total estimated digital GMV, the research showed.
E-commerce, financial services and travel are among leading sectors driving the region’s digital growth, the report showed. Southeast Asia is adding about 20 million new digital consumers in 2022.
The number of deals involving tech companies in the region remained relatively steady at about 1,200 in the first half of this year compared with a year-earlier period, according to the report. Early-stage investments are increasing, while later-stage deals are getting hit by dimmer public listing prospects in the capital markets. Southeast Asia venture capital funds held about $15 billion in “dry powder” at the end of 2021, down from $16 billion a year earlier.
“Macroeconomic headwinds are here,” Stephanie Davis, vice president at Google Southeast Asia, said in an interview with Bloomberg TV’s Haslinda Amin and Rishaad Salamat. “We do expect some conservancy in the later half of this year and next year. In fact, about three quarters of venture capital firms in the region expect there to be declines in valuation.”
Indonesia remains the region’s largest digital economy where online spending is predicted to rise to $130 billion by 2025. Vietnam is expected to grow at the fastest rate among the six countries tracked by the study, more than doubling in online GMV over the next three years.
–With assistance from Haslinda Amin and Rishaad Salamat.
(Updates with comment from executive in eighth paragraph)
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
