February 14, 2025 • 8 mins
In this episode, Michelle explores key stories shaping Southeast Asia's economic landscape. She begins with Indonesia's new sovereign wealth fund, its structure, and potential impact. The focus then shifts to Thailand's recent economic growth and future projections. Michelle also examines the Malaysian Ringgit and regional currency trends. The episode wraps up by considering the broader Asian economic context and concludes with closing remarks, encouraging continued engagement with Southeast Asia's dynamic markets.
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Episode Transcript
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(00:00):
Welcome back to the Southeast Asia MarketsDaily Brief.
I’m your host, AI Michelle.
Here are our top stories today...
First, Indonesia is set to launch a newsovereign wealth fund with over nine hundred
billion United States dollars in assets.
Second, Thailand's economy likely grew at itsfastest pace in over two years in the fourth
(00:24):
quarter.
Third, the Malaysian Ringgit gains amid strongeconomic prospects.
Let's dive into our first story.
Indonesia is preparing to launch a newsovereign wealth fund, Danantara Indonesia,
with assets under management exceeding ninehundred billion United States dollars.
This ambitious initiative, announced byPresident Prabowo Subianto, is set to
(00:47):
officially launch on February 24.
The fund aims to invest in sustainable,high-impact projects across various sectors,
including renewable energy, advancedmanufacturing, downstream industries, and food
production.
These investments are expected to significantlycontribute to Indonesia's goal of achieving an
(01:08):
eight percent economic growth rate by 2029, anotable increase from the five percent growth
recorded last year.
The announcement was made in a video statementshared by the government at the World
Governments Summit in Dubai.
The creation of Danantara Indonesia receivedparliamentary approval last week and is modeled
after Singapore's successful investment arm,Temasek.
(01:32):
The fund will take over all government holdingsin state-owned enterprises, including major
banks such as Bank Mandiri, Bank RakyatIndonesia, and Bank Negara Indonesia, from the
Ministry of State-Owned Enterprises.
President Prabowo highlighted that thegovernment has already saved over twenty
billion United States dollars throughefficiency measures, which is about ten percent
(01:55):
of Indonesia's annual spending.
These savings will be directed towardsfinancing more than twenty multi-billion dollar
projects, focusing on investments in criticalminerals like nickel, bauxite, and copper.
This strategic move not only aims to bolsterIndonesia's economic infrastructure but also
(02:15):
positions the country as a key player in theglobal commodities market.
Our second story today brings us to Thailand,where the economy likely experienced its
fastest growth rate in over two years duringthe fourth quarter of last year.
This growth was primarily fueled by a surge inforeign tourists and robust export activities,
(02:37):
which helped counterbalance the sluggishdomestic demand that has persisted despite
government efforts to stimulate consumptionthrough cash handouts.
Southeast Asia's second-largest economy wasforecasted to expand by 3.9 percent
year-on-year in the October to December period,a notable increase from the 3.0 percent growth
(02:59):
recorded in the previous quarter.
This prediction comes from a Reuters pollconducted between February sixth and twelfth
with fifteen economists.
The growth forecasts for the fourth quartervaried between 3.1 percent and 4.6 percent,
with the data expected to be officiallyreleased on February seventeenth.
(03:21):
According to Miguel Chanco, the chief emergingAsia economist at Pantheon Macroeconomics, the
recovery seen in Thai exports last yearcontinued strongly into the fourth quarter,
particularly in the services sector, whichlargely reflects the revival in tourism.
While domestic demand remained stalled, thestrength in exports provided a significant
(03:42):
offset.
On a quarterly basis, the gross domesticproduct likely grew by a seasonally adjusted
0.7 percent, which is a slight decrease fromthe 1.2 percent growth seen in the previous
quarter.
The service sector, particularly tourism,continued to accelerate, while the
manufacturing sector struggled, largely due todeclining demand in the auto industry, as noted
(04:07):
by Eugene Tan, an associate economist atMoody's.
Private consumption, which is a major componentof the gross domestic product, has faltered,
indicating broader economic weakness.
Despite the government's optimistic projectionof a 3.0 percent growth for 2024, up from 1.9
percent in 2023, the central bank governor,Sethaput Suthiwartnarueput, cautioned that weak
(04:33):
consumption might limit growth, suggesting itcould be closer to 2.7 percent, aligning with
the Reuters poll median.
Thailand's economic outlook is furthercomplicated by external factors such as an
economic slowdown in China, which is Thailand'slargest trading partner and a significant
source of tourism revenue.
(04:55):
Additional pressures include weak global demandand the escalating trade tensions between the
United States and China, which could adverselyaffect Thailand's trade prospects and overall
growth outlook this year.
Looking ahead, a separate Reuters poll projectsThailand's economic growth to average 2.9
percent in 2025, while Deputy Finance MinisterJulapun Amornvivat estimates the economy could
(05:19):
grow by 3.5 percent.
These projections underscore the challenges andopportunities facing Thailand as it navigates a
complex global economic landscape.
Now, let's turn our attention to the MalaysianRinggit, which has recently gained momentum
against the United States dollar, marking a 0.4percent increase.
(05:42):
This rise stands out among Asian emergingcurrencies, largely due to Malaysia's strong
economic prospects and political stability.
The optimism surrounding Malaysia's economicoutlook is fueled by better-than-expected
performance across various sectors, with theconstruction industry playing a pivotal role.
This sector has helped Malaysia surpass itsgrowth forecasts for 2024, setting a benchmark
(06:05):
for stable growth and political resilience inthe region.
In contrast, other regional currencies like thePhilippine peso are showing signs of caution.
This is partly due to the Bangko Sentral ngPilipinas' unexpected pause amid uncertainties
related to United States trade policies.
(06:26):
Meanwhile, the Thai baht's decline suggests anongoing sense of uncertainty, reflecting
broader regional dynamics.
Looking at the broader landscape, Asia presentsa mixed economic picture.
For instance, increases in Indonesia andTaiwan's currencies reveal positive investor
sentiment, while the stock markets in Jakartaand South Korea have risen, indicating optimism
(06:50):
about United States trade negotiations.
However, stock market dips in Taiwan,Singapore, and China highlight underlying
volatility and caution among investors.
It's essential for investors to recognize thatcurrency movements often mirror growth
potential.
The range of performances across Asiaunderscores the varied stages and strategies of
(07:15):
economic recovery.
While Malaysia's ringgit offers a glimpse ofconfidence driven by robust growth projections,
regions like Thailand and Singapore alsodisplay promising growth, albeit with necessary
caution regarding anomalies in economic data.
The diverse performances across Asia highlightthe complex landscape of the region's economy.
(07:40):
As Malaysia sets a standard for stable growthand political resilience, other countries face
challenges such as United States trade policiesand economic slowdowns in key markets like
China.
This dynamic environment requires regionalleaders to adapt their strategies, influencing
decisions from monetary policies to tradenegotiations.
(08:02):
As we wrap up this segment, it's clear that theMalaysian Ringgit's recent gains amid strong
economic prospects provide a beacon of optimismin an otherwise mixed regional economic
landscape.
Investors should remain vigilant, consideringboth opportunities and risks as they navigate
this complex terrain.
Alright that's a wrap for this episode.
(08:23):
If you enjoyed this brief, and would like tostay updated on latest episodes, don’t forget
to click ‘Follow’ in your podcast app.
Thanks again for listening, and hope to catchyou next time.
Welcome back to the Southeast Asia MarketsDaily Brief.
I’m your host, AI Michelle.
Here are our top stories today...
First, Indonesia is set to launch a newsovereign wealth fund with over nine hundred
billion United States dollars in assets.
Second, Thailand's economy likely grew at itsfastest pace in over two years in the fourth
(00:24):
quarter.
Third, the Malaysian Ringgit gains amid strongeconomic prospects.
Let's dive into our first story.
Indonesia is preparing to launch a newsovereign wealth fund, Danantara Indonesia,
with assets under management exceeding ninehundred billion United States dollars.
This ambitious initiative, announced byPresident Prabowo Subianto, is set to
(00:47):
officially launch on February 24.
The fund aims to invest in sustainable,high-impact projects across various sectors,
including renewable energy, advancedmanufacturing, downstream industries, and food
production.
These investments are expected to significantlycontribute to Indonesia's goal of achieving an
(01:08):
eight percent economic growth rate by 2029, anotable increase from the five percent growth
recorded last year.
The announcement was made in a video statementshared by the government at the World
Governments Summit in Dubai.
The creation of Danantara Indonesia receivedparliamentary approval last week and is modeled
after Singapore's successful investment arm,Temasek.
(01:32):
The fund will take over all government holdingsin state-owned enterprises, including major
banks such as Bank Mandiri, Bank RakyatIndonesia, and Bank Negara Indonesia, from the
Ministry of State-Owned Enterprises.
President Prabowo highlighted that thegovernment has already saved over twenty
billion United States dollars throughefficiency measures, which is about ten percent
(01:55):
of Indonesia's annual spending.
These savings will be directed towardsfinancing more than twenty multi-billion dollar
projects, focusing on investments in criticalminerals like nickel, bauxite, and copper.
This strategic move not only aims to bolsterIndonesia's economic infrastructure but also
(02:15):
positions the country as a key player in theglobal commodities market.
Our second story today brings us to Thailand,where the economy likely experienced its
fastest growth rate in over two years duringthe fourth quarter of last year.
This growth was primarily fueled by a surge inforeign tourists and robust export activities,
(02:37):
which helped counterbalance the sluggishdomestic demand that has persisted despite
government efforts to stimulate consumptionthrough cash handouts.
Southeast Asia's second-largest economy wasforecasted to expand by 3.9 percent
year-on-year in the October to December period,a notable increase from the 3.0 percent growth
(02:59):
recorded in the previous quarter.
This prediction comes from a Reuters pollconducted between February sixth and twelfth
with fifteen economists.
The growth forecasts for the fourth quartervaried between 3.1 percent and 4.6 percent,
with the data expected to be officiallyreleased on February seventeenth.
(03:21):
According to Miguel Chanco, the chief emergingAsia economist at Pantheon Macroeconomics, the
recovery seen in Thai exports last yearcontinued strongly into the fourth quarter,
particularly in the services sector, whichlargely reflects the revival in tourism.
While domestic demand remained stalled, thestrength in exports provided a significant
(03:42):
offset.
On a quarterly basis, the gross domesticproduct likely grew by a seasonally adjusted
0.7 percent, which is a slight decrease fromthe 1.2 percent growth seen in the previous
quarter.
The service sector, particularly tourism,continued to accelerate, while the
manufacturing sector struggled, largely due todeclining demand in the auto industry, as noted
(04:07):
by Eugene Tan, an associate economist atMoody's.
Private consumption, which is a major componentof the gross domestic product, has faltered,
indicating broader economic weakness.
Despite the government's optimistic projectionof a 3.0 percent growth for 2024, up from 1.9
percent in 2023, the central bank governor,Sethaput Suthiwartnarueput, cautioned that weak
(04:33):
consumption might limit growth, suggesting itcould be closer to 2.7 percent, aligning with
the Reuters poll median.
Thailand's economic outlook is furthercomplicated by external factors such as an
economic slowdown in China, which is Thailand'slargest trading partner and a significant
source of tourism revenue.
(04:55):
Additional pressures include weak global demandand the escalating trade tensions between the
United States and China, which could adverselyaffect Thailand's trade prospects and overall
growth outlook this year.
Looking ahead, a separate Reuters poll projectsThailand's economic growth to average 2.9
percent in 2025, while Deputy Finance MinisterJulapun Amornvivat estimates the economy could
(05:19):
grow by 3.5 percent.
These projections underscore the challenges andopportunities facing Thailand as it navigates a
complex global economic landscape.
Now, let's turn our attention to the MalaysianRinggit, which has recently gained momentum
against the United States dollar, marking a 0.4percent increase.
(05:42):
This rise stands out among Asian emergingcurrencies, largely due to Malaysia's strong
economic prospects and political stability.
The optimism surrounding Malaysia's economicoutlook is fueled by better-than-expected
performance across various sectors, with theconstruction industry playing a pivotal role.
This sector has helped Malaysia surpass itsgrowth forecasts for 2024, setting a benchmark
(06:05):
for stable growth and political resilience inthe region.
In contrast, other regional currencies like thePhilippine peso are showing signs of caution.
This is partly due to the Bangko Sentral ngPilipinas' unexpected pause amid uncertainties
related to United States trade policies.
(06:26):
Meanwhile, the Thai baht's decline suggests anongoing sense of uncertainty, reflecting
broader regional dynamics.
Looking at the broader landscape, Asia presentsa mixed economic picture.
For instance, increases in Indonesia andTaiwan's currencies reveal positive investor
sentiment, while the stock markets in Jakartaand South Korea have risen, indicating optimism
(06:50):
about United States trade negotiations.
However, stock market dips in Taiwan,Singapore, and China highlight underlying
volatility and caution among investors.
It's essential for investors to recognize thatcurrency movements often mirror growth
potential.
The range of performances across Asiaunderscores the varied stages and strategies of
(07:15):
economic recovery.
While Malaysia's ringgit offers a glimpse ofconfidence driven by robust growth projections,
regions like Thailand and Singapore alsodisplay promising growth, albeit with necessary
caution regarding anomalies in economic data.
The diverse performances across Asia highlightthe complex landscape of the region's economy.
(07:40):
As Malaysia sets a standard for stable growthand political resilience, other countries face
challenges such as United States trade policiesand economic slowdowns in key markets like
China.
This dynamic environment requires regionalleaders to adapt their strategies, influencing
decisions from monetary policies to tradenegotiations.
(08:02):
As we wrap up this segment, it's clear that theMalaysian Ringgit's recent gains amid strong
economic prospects provide a beacon of optimismin an otherwise mixed regional economic
landscape.
Investors should remain vigilant, consideringboth opportunities and risks as they navigate
this complex terrain.
Alright that's a wrap for this episode.
(08:23):
If you enjoyed this brief, and would like tostay updated on latest episodes, don’t forget
to click ‘Follow’ in your podcast app.
Thanks again for listening, and hope to catchyou next time.
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