In 2024, Indonesia's economic growth has notably outpaced that of its neighboring countries, Singapore and Malaysia. This development underscores Indonesia's resilience and strategic economic planning in a dynamic global landscape.​

Comparative Economic Performance in Southeast Asia

According to a recent Southeast Asia quarterly economic review by McKinsey, Indonesia experienced a slight growth uptick in the fourth quarter of 2024, while growth moderated in Malaysia and Singapore. This indicates that Indonesia's economy is on a positive trajectory, contrasting with the more tempered growth observed in its neighboring countries. ​

Factors Driving Indonesia's Economic Growth

Several key factors have contributed to Indonesia's robust economic performance:

• Diversified Economy: Indonesia's mixed economy, characterized by both private and public sector involvement, has allowed for flexibility and resilience. As the largest economy in Southeast Asia, Indonesia has leveraged its diverse industries to sustain growth. ​
• Investment in Infrastructure: Significant investments in infrastructure have improved connectivity and efficiency, fostering economic activities across the archipelago.​
• Strong Domestic Consumption: A large and growing middle class has driven domestic consumption, providing a stable foundation for economic expansion.​
• Export Performance: Indonesia's main export markets include India (27.5%), China (14.8%), Malaysia (7.5%), the Netherlands (7.1%), and Singapore (5.1%). This diversified export portfolio has contributed to economic stability and growth.

Implications for the Region

Indonesia's economic ascent has several implications for the Southeast Asian region:​

• Regional Leadership: As Indonesia's economy grows, it positions the country as a more influential player within ASEAN, potentially leading regional initiatives and fostering economic integration.​
• Investment Magnet: Robust economic performance attracts foreign direct investment, which can have spillover benefits for neighboring countries through increased trade and collaboration.​
• Benchmark for Policy: Indonesia's strategies may serve as a model for other nations aiming to revitalize their economies amidst global uncertainties.​

Future Outlook

The International Monetary Fund’s October 2024 World Economic Outlook projects Indonesia’s real GDP to grow by 5.0% in 2024 and 5.1% in 2025. This steady growth trajectory suggests that Indonesia will continue to strengthen its economic position in the region.