Thanks to Domestic Economic Performance, the Indonesian Economy Can Continue to Grow by 5.5 Percent

By : Arzan Malik Narendra )*

Thanks to the good performance of the domestic economy, the economy in the Republic of Indonesia (RI) can continue to experience and record growth. No half-hearted, the figure even reached 5.5 percent.

Bank Indonesia (BI) estimates that economic growth in the Republic of Indonesia (RI) throughout 2024 will be in a good range, namely around 4.7 percent to 5.5 percent.

All of Indonesia’s good economic growth records are due to none other than the good performance of the domestic economy. According to the Governor of BI, Perry Warjiyo, household consumption and investment continued to drive improved performance in gross domestic product (GDP) in the second quarter of this year. Thus, exports of goods also continue to increase, which is driven by the increase in exports of metal ore and steel to main trading partner countries such as this nation, India and China.

Meanwhile, spatially, strong economic growth in Indonesia occurred in the majority of regions with the highest growth, such as in Sulawesi, Maluku, Papua (Sulampua), then Bali, Nusa Tenggara (Balinusra) and Kalimantan. Seeing how things will be in the second quarter of 2024, BI predicts that economic growth in the third and fourth quarters will continue well.

This positive projection is also driven by plans to increase fiscal stimulus from 2.3 percent to 2.7 percent of GDP as well as how export performance has increased with increasing demand from major trading partners.

Even though economic growth continues to increase, BI will continue to strengthen the synergy between fiscal stimulus by the Indonesian Government and macroprudential stimulus by its side. That way, economic growth can continue to be sustainable, especially from the demand side. Not only that, but BI also continues to strengthen policy coordination with the government to mitigate the impact of the risk of high global uncertainty.

Policy coordination with the Government, both central and regional, runs through the National Food Inflation Control Movement (GNPIP) program in various regions within the Central and Regional Inflation Control Teams (TPIP and TPID).

In line with BI projections, the Ministry of Finance (Kemenkeu) is also very optimistic that national economic growth in the second semester of 2024 will continue to be above 5 percent. Minister of Finance (Menkeu) Sri Mulyani Indrawati projects that Indonesia’s economic growth in the second half of 2024 will be in the range of 5 to 5.2 percent. This projection is still in line with the economic growth assumption in the 2024 State Revenue and Expenditure Budget (APBN) which is 5.2 percent.

This growth is of course also supported by strong domestic demand and the inflation rate which is maintained at a consistently low figure. Even so, the government continues to be vigilant about the global environment which is currently still moving dynamically.

One of the global uncertainties occurred due to the results of the global elections, including relations between countries which were experiencing very high tension with increasing geopolitical temperatures.

The projected national economic growth figure in the range of 5.0 percent to 5.2 percent is to illustrate that this nation still has a buffer from the domestic side, factors that the government continues to maintain so that in global conditions that cannot be controlled, the country’s economy is still on track. right.

Meanwhile, Coordinating Minister (Menko) for Economic Affairs Airlangga Hartarto emphasized that Indonesia has very strong economic resilience. In fact, this nation is in the top 3 position among the G20 countries.

For your information, the Indonesian economy is still growing at around 5 percent, while in other countries it is experiencing a slowdown and some have even fallen into the brink of crisis. Indonesia’s inflation is also said to be still under control at 2.51%. This figure is lower than other countries, including the United States (US). International rating agencies also still rate Indonesia as investment grade.

In addition, the National Medium Term Development Plan (RPJMN) 2025-2045 states that Indonesia’s economic growth target is in the range of 6-7%. Then investment is also targeted to grow up to 6.8% with a target investment value in 2025 of IDR 1,900 trillion.

To achieve this target, the one map policy is important because it is part of licensing and Online Single Submission (OSS) spatial planning. This step is a strategic part of completing the National Strategic Project (PSN) and developing Special Economic Zones (KEK).

The optimism of many parties continues to surround the projections for the economic growth of the Republic of Indonesia (RI) to be able to reach above 5 percent or even 5.5 percent. This record is good apparently because the performance of the domestic economy is also very strong so that it becomes a support or solid foundation. This achievement certainly needs to be appreciated as proof that the Government’s economic policy is on the right track.

)* Contributor to the Nusa Cyber ​​Institute