DBS Highlights Rapid FDI Growth in Southeast Asia

TEMPO.CO, Jakarta - DBS Group Research Senior Economist Radhika Rao stated that Southeast Asia has emerged as one of the fastest-growing destinations for foreign direct investment (FDI) amid changing global supply chains. She noted that FDI inflows to Southeast Asia climbed from roughly US$225 billion in 2024 to nearly US$250 billion in 2025.

Radhika highlighted that Asia remains the primary magnet for global foreign investment. In 2025, total FDI flows into East Asia reached approximately US$245 billion. She pointed out that the investment surge in Southeast Asia is driven by global supply chain relocations, manufacturing expansion, and growing interest among international investors in the ASEAN market.

"The increasingly multipolar global economic developments offers significant opportunities for Indonesia to reinforce its position as a new growth center, alongside the broader diversification of investment, manufacturing, and global supply chains," Radhika said during a media briefing titled "The Indonesia Equation: Risks, Returns, and the Road to 2027" in South Jakarta on Thursday, September 10, 2026.

According to Radhika, Indonesia's future advantages will depend on more than just its natural resources and vast domestic market. The capacity to attract tech-driven investments, strengthen domestic value chains, expand the digital economy, and maintain policy and macroeconomic stability are vital factors for boosting investment appeal.

She added that the trajectory of US interest rates and global market conditions will also weigh on capital flows, the rupiah exchange rate, and Indonesia's financing outlook leading up to 2027. These variables must be factored in by multinational corporations when determining capital costs and mapping out financial strategy.

One of the factors seen as creating investment opportunities across Asia, including Indonesia, is the shift in supply chain strategies toward "China+1" and "Taiwan+1" models. These strategies prompt companies to diversify their production hubs beyond China and Taiwan.

For Indonesia, this realignment offers the potential to establish the country as an electric vehicle (EV) manufacturing hub and a premier investment destination in Southeast Asia. Radhika noted that the industrial downstreaming agenda can also elevate the value added of the national industry while unlocking capital in energy, infrastructure, and strategic manufacturing sectors.

Supported by rich resources, an expanding market, and pro-investment policies, Indonesia stands well-positioned to cement its role within Asia's technology, electronics, semiconductor, and EV ecosystems.

The steadily brightening prospects for ASEAN FDI present a major opportunity for Indonesia to capture larger capital inflows. According to Radhika, this momentum must be backed by structural reforms, regulatory certainty, and sustainable investments to accelerate economic transformation.

Meanwhile, Natalia Ratulangi, Head of Large & Multinational Corporates in the Institutional Banking Group at DBS Bank Indonesia, emphasized that multinational corporations now require more than just capital financing. Businesses face compounding risks from shifting interest rates, foreign exchange volatility, regulatory updates, and local economic sentiment.

"So, corporations require banking partners capable of delivering sharp insights to navigate local market trends across global and sector-specific landscapes," she said.

According to Natalia, these conditions increase the need for businesses to engage financial partners equipped to offer detailed intelligence on local, global, and sectoral market dynamics.

Multinational corporations also require financial solutions tailored to cross-regional demands. Natalia pointed out that DBS's Asian network and digital banking infrastructure serve to support the growing complexity of corporate requirements.

DBS Indonesia continues to advocate for measures that broaden foreign investment and build an integrated investment ecosystem. This support is designed to assist multinational corporations in scaling their operations throughout the Asian region.

Read: Indonesia's Crude Oil Price Rises to US$89.43 per Barrel

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