UN Says Indonesia to Grow 4.9% This Year, Malaysia at 4.4%

Indonesia is projected to grow its economy by 4.9 percent in 2024, even as Malaysia’s growth is forecast at 4.4 percent, according to the United Nations’ World Economic Situation and Prospects 2024 report released in Jakarta on April 5.

The UN’s Department of Economic and Social Affairs (DESA) cited stronger-than-expected domestic consumption and a rebound in manufacturing output as key drivers behind Indonesia’s upward revision from its earlier 4.7 percent estimate. Malaysia’s projection was adjusted downward slightly from 4.6 percent due to weaker external demand affecting its export-oriented electronics sector.

The report, presented during a joint briefing with Indonesia’s Ministry of National Development Planning (Bappenas) and the ASEAN Secretariat, noted that both countries continue to outpace the regional average for developing Asia, which stands at 4.2 percent. Indonesia’s growth is now expected to surpass Thailand’s projected 3.8 percent and Vietnam’s 5.5 percent, though it remains below Cambodia’s forecast of 6.1 percent.

UN economists highlighted Indonesia’s strategic investments in downstream nickel processing and renewable energy infrastructure as contributing factors to its resilience amid global commodity volatility. In Malaysia, the report pointed to ongoing fiscal consolidation efforts and targeted subsidies for low-income households as mitigating factors against slower export growth.

Officials from Bappenas confirmed that the government’s 2024 state budget, which allocates 22.1 trillion rupiah ($1.4 billion) for strategic infrastructure projects, remains aligned with the UN’s growth assumptions. No revisions to the budget are currently planned based on the forecast.

The ASEAN Secretariat reiterated its call for coordinated regional policies to address supply chain disruptions in semiconductors and critical minerals, sectors where both Indonesia and Malaysia play significant roles. No joint statement or policy initiative was announced following the briefing.

The UN’s next regional economic update for Southeast Asia is scheduled for release in Bangkok on July 10, 2024.