While economic growth in Southeast Asia remains robust, it is vulnerable to external headwinds such as any slowdown in global demand. Many Southeast Asian countries are heavily reliant on one or two major trading partners or export sectors, exacerbating the risks of global uncertainty. Despite this, robust regional demand is increasingly helping to buffer against these risks, with intraregional exports now surpassing exports to the United States, European Union, or Japan. The rapid rise of the consumer class is also fuelling a trade transition, with the region moving away from being merely the source and destination of intermediate goods to becoming the main export destination for final goods. Services trade is also accounting for an increasing share of trade for many regional economies. Southeast Asia can further boost its growing economic vibrancy by continuing to address regional economic barriers, especially in services trade and investment openness.

Over the past two decades, Southeast Asia has experienced significant economic growth, lifting 100 million people out of poverty. The region is attracting increased foreign direct investment (FDI), which hit record levels of USD 223 billion in 2022. The focus is now shifting towards ensuring that FDI not only boosts economic growth but also contributes to sustainability objectives in the region. However, Southeast Asia's rapid economic development presents challenges for the decarbonisation of industry and the energy sector. Well-designed FDI policies, including further reducing investment restrictions, aligning investment promotion strategies with international development objectives, and promoting and enabling responsible business conduct, can boost the green dividend of foreign investment. 

Improving public administration, including regulatory policy and collection of tax revenues, is an important focus for Southeast Asia. International regulatory co-operation at the regional level continues to have a strong impact, through ASEAN-led initiatives such as the ASEAN Guidelines on Good Regulatory Practice and the implementation of the ASEAN Single Window. Digitalisation is also a clear driver for administrative reforms, although managing the uneven gains from technology to promote fairness is an ongoing challenge. Southeast Asia is also increasingly co-operating on tax transparency and revenue collection through participation in OECD initiatives such as the Global Forum on Transparency and Exchange of Information for Tax Purposes and the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting.