International Monetary Fund (IMF) claimed the economic growth in ASEAN is forecasted to increase, with a projection of 4.9% this year.
Heaptalk, Jakarta — The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, revealed that ASEAN’s economic progress continues to survive amidst a global economic slowdown due to several issues.
In between the plenary session of the 43rd ASEAN Summit (KTT), Jakarta, Kristina delivered that the global economy remains slowed down due to the COVID-19 pandemic and the war between Russia and Ukraine, with a growth rate of only 3%, the lowest output in a decade compared to the pre-pandemic era. Meanwhile, based on her observation, the economic growth in ASEAN is forecasted to increase, with a projection of 4.9% this year.
She perceived that the positive economic enhancement in ASEAN would continue in 2024. According to her, regional economic growth will also back the world because the ASEAN economy has contributed 10% of global economic growth.
“Actually, ASEAN was predicted to increase before the pandemic. However, this regional economic growth halved and lost potential GDP of up to 8%, which is considered a significant consequence. For this reason, sustaining this growth momentum is critical in contributing to the society in ASEAN and the world.” added Kristalina.
Nevertheless, she emphasized that the global interest rate will remain high until 2025 due to the supply chain disruption due to the COVID-19 pandemic and wars between Ukraine and Russia. In response to this effect, Kristina claimed that developed countries would continue to retain high-interest rates.
Kristalina, in her further statement, admitted that these high interest rates in the US and Europe might depress the exchange rates of ASEAN countries. Moreover, the budget financing needs of each country are still relatively high.
To maintain robust economic growth, Kristalina affirmed that ASEAN countries must improve multiple critical aspects: maintaining microeconomic and financial stabilization by ensuring taxes are collected fully and overcoming tax avoidance. On the other hand, she suggested that countries must invest in education and skills for their society while also strengthening investment in the green economy sector and digital technology.
“ASEAN can be a model of global cooperation and a positive point amidst an uncertain situation worldwide. For this reason, I suggested that ASEAN countries speak clearly about the need for international cooperation. No one is more appropriate than you because you embrace diversity.” The Managing Director IMF, Kristalina said.
