In a week where U.S. President Barack Obama has made Southeast Asia the center of his first post-election trip overseas, upbeat economic news highlights another reason why the region is gaining in prominence globally.
While much of the world grapples with high unemployment and anemic economic growth, data on Monday showed Thailand's economy grew a
That followed news late Friday that Malaysia's economy expanded an annual 5.2 percent in the third quarter, much higher-than-expected and compared with growth of 5.6 percent in the second quarter.
Both Southeast Asian economies were boosted by strong demand at home, which helped offset the weakness in exports that has hurt other Asian economies.
Indeed, strong third-quarter GDP numbers make Malaysia one of Asia's fastest-growing economies behind China and Indonesia, which grew 7.4 percent and 6.2 percent respectively in the third quarter.
"Malaysia's growth performance has consistently beaten our forecast for each of the three quarters so far this year and this string of upside surprises has been caused by the robust domestic economy, with an investment boom being the main driver," OCBC Bank economist Gundy Cahyadi said in a note.
In contrast to Malaysia, Thailand, and Indonesia, economic growth in regional heavyweight Singapore contracted 1.5 percent in the third quarter from the previous one, while weak exports remain a concern for the region as whole, economists say.
Nevertheless, analysts add the region remains somewhat of a bright spot.
"We do see signs of a bottoming out in Asian economies, so ASEAN will ride higher with the general upward momentum," said Vishnu Varathan, market economist at Mizuho Corporate Bank in Singapore, referring to the Association of Southeast Asian Nations, whose members include Malaysia, Singapore, Thailand, Vietnam and the Philippines.
"It is a slightly brighter spot in a still dismal global economy," he said. "From a purely economic point of view, Obama's trip highlights that the U.S. may not have fully exploited its ties with Southeast Asia."
Obama, who flew into Thailand at the weekend, made a
Booming Stock Markets
Southeast Asia has not just caught the attention of the U.S. President. The region's equity markets have soared this year and analysts put this down to a combination of factors such as stronger economic growth and investors buying regional shares as a way to position for a rebound in China's economy.
Stocks in the Philippines and Thailand have gained about 25 percent this year, with Philippine shares setting a record high on Tuesday following a stellar overnight rally on Wall Street. Indonesia's stock market is up almost 13 percent this year, outperforming a 9 percent tally in the MSCI Asia stock index that excludes Japan.
"We still like Thailand, it is strong fundamentally. The government has done a lot to boost local consumption, for instance raising the minimum wage, boosting farm subsidies and a lot of fiscal expansion," said David Poh, regional head of asset management at Societe Generale in Singapore.
Thailand's minimum wage is expected to rise to 300 baht ($9.8) nationwide next year.
"So, Thailand's stock market has done pretty well since the start of the year and I still favor this market," he added.
In addition, economists said strong domestic demand and tourism in Thailand have acted as a strong buffer to weak exports, which fell 3 percent in the third quarter from a year earlier as global demand for Asian goods deteriorated.
"The (Thai GDP data) underscored that the domestic demand engine is still running at a decent speed, providing some counter-weight against the firming external headwinds," Leif Lybecker Eskesen, Chief Economist for India & ASEAN at HSBC said in a note.
Investors are also turning their attention to Myanmar, which is slowly opening up its economy after five decades of tight control under military rule.
"There's a lot to be done to create an investor-friendly market," said Andrew Rickards, CEO at Yoma Strategic Holdings, a developer which has just raised about $80 million to acquire an 80 percent stake in a hotel development in Myanmar's capital city. "We are confident about the way things are moving with the current government."
(Read More: China's Strong Hand in Myanmar Under Threat?)
- By CNBC's Dhara Ranasinghe, follow her on twitter @DharaCNBC