Southeast Asia’s digital economy will contribute 56 percent to its gross domestic product (GDP) by 2027, with digital payments taking the lead (61.5 percent), said UnaFinancial on Tuesday.

The firm said in a statement that in 2027, the gross value added (GVA) of the digital economy in Southeast Asia is expected to reach $2.35 trillion, increasing by 45 percent (+$732 billion) compared to 2022.

This amount corresponds to 55.7 percent of the projected GDP in 2027 against 44.8 percent in 2022.

Digital payments will remain the leading sector with a share of 61.5 percent.

Digital commerce will grow from 5.6 percent to 10.1 percent; mobile apps will grow from 0.3 percent to 0.9 percent, and online media market will grow from 0.9 percent to 1.1 percent.

At the same time, the share of other sectors will reduce. These include electronic and optical production (from 21 percent to 17.5 percent), telecommunication infrastructure (from 7.4 percent to 7 percent) and information technology *(IT) and software services (from 2 percent to 1.9 percent).

In absolute terms, the GVA of all sectors will grow. The largest increase will be shown by mobile apps (+303 percent), followed by digital commerce (+160 percent), online media (+75 percent), digital payments (+42 percent), telecommunication infrastructure and IT and software (+39 percent each).

The smallest increase will occur in electronic and optical production (+21 percent).

“In the next few years, while digital economies of Indonesia, Malaysia, Vietnam, Singapore and the Philippines will make up 97.6 percent of the total in Southeast Asia, Myanmar, Laos, Cambodia and Brunei may show the fastest growth given the timely introduction of digital technologies,

“Yet, the faster growth rates are explained by the small size of these economies in terms of GDP. This means that they will still be sensitive to various structural transformations,” said analysts from UnaFinancial.

It is noted that the GVA of the digital economy of Southeast Asian countries made up 45 percent of the region’s GDP in 2022.

In 2022, the digital economy of Southeast Asia was estimated at $1.6 trillion GVA, which is equivalent to 44.8 percent of the region’s GDP.

62.9 percent of it was represented by the Digital payments sector, which is equivalent to approximately $1 trillion of GVA.

Digital payments were followed by electronics and optical production (21 percent), information and telecommunication infrastructure (7.4 percent), digital commerce (5.6 percent), IT and software services (2 percent), online media market (0.9 percent) and mobile apps (0.3 percent).

Indonesia had the largest share of the digital economy in Southeast Asia (42.6 percent or $691.8 billion).

It was followed by Malaysia (15.6 percent), Singapore (13 percent), Thailand (11.2 percent), Vietnam (10.7 percent), Philippines (5.7 percent), Myanmar (0.6 percent), Cambodia (0.3 percent), Laos (0.2 percent) and Brunei (0.1 percent).

“This coincides with the distribution of the countries by their GDPs, which also confirms the adequacy of the obtained estimates,

“Indonesia’s leadership is explained by the country’s population — in 2022, it made up 41.1% of the total population in Southeast Asia,” said analysts of UnaFinancial.

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