Friday, June 14, 2024

Indonesia aims for 40% Southeast Asian foreign investment given its large economy contribution in ASEAN

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Airlangga Hartarto, the Coordinating Minister for Economic Affairs targets 40% of Southeast Asian foreign direct investments (FDI) to flow into Indonesia, building on the country’s robust economic performance.

With Indonesia’s current FDI standing at US$ 224.2 billion, marking a 5.5% increase from 2021, the nation aims to attract around IDR 80 billion in FDI.

“At least 40% of the investments should come to Indonesia, given our significant share of 40% in the total ASEAN economy,” Airlangga emphasized.

According to Worldmeters, the population of South East Asia reaches 687.68 million people, while Indonesia sits first with a population of 277.53 million people contributing 8.54% of the world’s total population. Giving one of the third biggest consumer base markets in the world after China and India globally. Meanwhile, ASEAN’s GDP about US$ 3.9 trillion in 2021 or 3.6% of the world’s GDP. On the other hand, Indonesia’s GDP sits the highest with US$ 1,390 billion.

Despite global economic challenges, he expressed confidence that FDI will continue to enter Indonesia, attributing this to the country’s political stability.

“Secondly, we’ve maintained a steady 5% economic growth for seven quarters, while inflation has been kept at 2.2%, down from the initial year-end target of 3%,” he noted.

Indonesia has achieved impressive, inclusive economic growth with controlled inflation. In the second quarter, Indonesia’s economy grew by 5.17% year-on-year, with the inflation rate at 2.28% as of September.

To mitigate US dollar uncertainties, Indonesia is proactively managing foreign exchange from exports.

Airlangga expressed hope that UOB, one of the first Singaporean banks to host an ASEAN conference in Indonesia, will further boost foreign investment. The UOB Gateway to ASEAN Conference 2023 gathers business leaders, partners, and government representatives from Indonesia and other Southeast Asian countries.

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