UOB Senior Economist Enrico Tanuwidjaja shared his observations on the macro- economic outlook, and its implications for growth opportunities in ASEAN, with Indonesia as a key hub.

He paints a backdrop of slowing global economic growth driven by tighter monetary policies across the globe in both developed and emerging economies. This has been compounded by ongoing challenges from China's slowing economic growth — a situation likely to continue in the foreseeable future.

On a more optimistic note, ASEAN has not only proven itself as a particularly resilient region, but also offers many sources of untapped growth potential despite having to endure the pandemic with the rest of the world. After contracting by 4% in 2020, the ASEAN-6’s economies quickly rebounded strongly to register 4.5% growth in 2021, followed by an even more impressive 6% in 2022.

For 2024 and beyond, the ASEAN region is expected to keep its growth momentum steady as it continues to be driven by robust domestic demand, increasing foreign direct investment, and strong external balances. Many economies in ASEAN have also reached the peak of their interest rate hiking cycle and are likely to soon deliver rate cuts aimed at supporting further growth, abating inflationary pressure ahead of the US or European economies.

He also cited Indonesia’s strong economic potential — remaining on track to grow by approximately 5.1% for 2023, and at an even faster rate of 5.2% in 2024, thus becoming one of the world’s faster-growing economies. This optimism in the immediate future is driven by incoming foreign direct investment continuing to power steady growth, most notably in the area of mineral and base metals mining industry.

Beyond the short term, Enrico also cited further progress in other areas: energy transition, infrastructural optimisation, digital transformation and the new capital city, as key facilitators of growth for the medium-term.

He closed by reaffirming the need for strategic cooperation amongst ASEAN economies; and in particular Indonesia’s continuing position as a strategic gateway to unlock more of the region's economic potential, supported by its strong investment proposition as both provider for competitive alternative manufacturing and a large domestic consumption market.

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