Latest Economic Highlights in Southeast Asia (January 20, 2026)

1. Malaysia’s Khazanah to Steer More Capital to Power Grids, Chip Firms

Malaysia's sovereign wealth fund Khazanah plans to channel more capital into power grids and local semiconductor firms as AI reshapes investable opportunities. CEO Amirul Feisal Wan Zahir highlighted grid resilience and chips as central to competitiveness in the AI boom, with ringgit seen having room to strengthen.

2.ASEAN’s AI Startups Focus on Profitability Amid Funding Bubble Fears

ASEAN AI startups are shifting focus to profitability and sustainable growth amid fears of a funding bubble. While investments remain strong, emphasis grows on capital efficiency and real returns over inflated valuations.

3. Malaysia Places Second Among ASEAN Economies in 2026 Asia Manufacturing Index

Malaysia ranks second in ASEAN and high overall in the 2026 Asia Manufacturing Index across 11 Asian countries, driven by semiconductors, power infrastructure, and supply chain diversification, underscoring its strong manufacturing competitiveness.

4. From Reset to Readiness: South-east Asian Capital Markets in 2026

After 2025's reset in Southeast Asia's tech and investment markets, 2026 brings readiness with stabilizing factors like lower rates, weaker dollar, and reopened IPOs in Hong Kong/India. Regional GDP ~4.5%, low inflation, focus on governance, exits, and capital discipline amid tariffs and uncertainties.

5.Philippines Projected to Lead Southeast Asia Growth in 2026

World Bank projects Philippines 2026 growth at 5.3%, among the fastest in Southeast Asia, driven by recovering consumption, BPO strength, and infrastructure, despite trade tensions and scandals.