Indonesia Forecasts 5.2% Economic Growth in 2024
Jakarta, The Gulf Observer: Finance Minister Sri Mulyani Indrawati has expressed confidence in the resilience of Indonesia’s economy, projecting a robust growth rate of 5.2 percent for the year 2024. In a statement released by the Ministry of Finance on Wednesday, Minister Indrawati cited global dynamics and domestic economic potential as key factors driving this optimistic forecast.
According to the January edition of the World Economic Outlook by the International Monetary Fund (IMF), global economic growth is estimated to be 3.1 percent in both 2023 and 2024.
Minister Indrawati emphasized the stability of domestic inflation, attributing it to the impact of the 2024 general elections on public and government spending. Additionally, policies initiated in the housing sector during the fourth quarter of 2023 are anticipated to be pivotal in propelling economic growth throughout 2024.
In alignment with these projections, the 2024 State Budget is strategically designed to mitigate external challenges and expedite an inclusive and sustainable economic transformation, Minister Indrawati remarked.
Highlighting Indonesia’s economic performance in 2023, Minister Indrawati underscored positive growth amid the anticipated global economic slowdown. The country’s economy expanded by 5.04 percent (year-on-year) in the fourth quarter of 2023 and 5.05 percent for the entire year, buoyed by strong demand, particularly in consumption and investment.
Public consumption increased by 4.47 percent in the fourth quarter of 2023 and 4.82 percent for the entire year. Gross Fixed Capital Formation (investment) recorded a notable growth of 5.02 percent in the fourth quarter and 4.4 percent throughout 2023, marking an increase from 3.9 percent in 2022.
Positive growth was observed across various business sectors, with manufacturing, trade, agriculture, and mining playing significant roles. The manufacturing sector expanded by 4.07 percent in the fourth quarter and 4.64 percent for the entirety of 2023, driven by strong domestic and global demand for Indonesia’s export products.
The trade sector also exhibited positive growth, registering a 4.09 percent increase in the fourth quarter and a 4.85 percent expansion in 2023. This growth was attributed to heightened trade activities in domestic goods and increased sales in the motorbike sector.
Addressing changes in weather patterns due to the El Nino phenomenon, Minister Indrawati noted moderate growth in the agricultural sector, recording a 1.12 percent increase in the fourth quarter of 2023 and a 1.30 percent growth for the entire year.
Despite fluctuations in commodity prices, the mining sector demonstrated resilience, posting a strong growth of 7.46 percent in the fourth quarter of 2023 and 6.12 percent throughout 2023. The surge was particularly supported by increased demand for processed nickel in the metal ore mining sub-sector.
Minister Indrawati concluded by affirming the government’s commitment to navigating economic challenges, leveraging the 2024 State Budget to foster sustainable and inclusive economic development in Indonesia.
