Indonesia forecasts economic growth of 5.2 percent in 2024

JAKARTA (ANTARA) – Finance Minister Sri Mulyani Indravati has expressed confidence that Indonesia's economy will remain strong with a growth rate of 5.2 percent in 2024.

„Based on global dynamics and domestic economic potential, Indonesia's economy is estimated to grow strongly in 2024, at 5.2 percent,” he noted in his ministry's statement on Wednesday.

In the January edition of the World Economic Outlook, the International Monetary Fund (IMF) estimated global economic growth at 3.1 percent in 2023 and 2024.

Indravati said domestic inflation will remain relatively stable due to the impact of the 2024 general elections on public and government spending. Housing sector policies launched in the fourth quarter of 2023 will be one of the driving forces in 2024.

In line with this, he noted that the 2024 state budget would be used to reduce external volatility and accelerate economic transformation in an inclusive and sustainable manner.

He highlighted Indonesia's economy in 2023, which has grown favorably amid a projected slowdown in the global economy.

Indonesia's economy is projected to grow 5.04 percent (year-on-year/year) in the fourth quarter of 2023 and 5.05 percent for the full year of 2023, supported by strong demand, particularly consumption and investment.

Public consumption increased by 4.47 percent in the fourth quarter of 2023 and by 4.82 percent for the whole of 2023.

He pointed out that gross fixed capital formation (PMTB) or investment growth was reported at 5.02 percent in the fourth quarter of 2023 and 4.4 percent for the full year, up from 3.9 percent in 2022.

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Indravati said that positive growth was also recorded in business sectors with manufacturing, trading, agriculture and mining sectors contributing the most.

The manufacturing sector grew positively at 4.07 percent in the fourth quarter and 4.64 percent for the whole of 2023. Strong domestic and global demand for Indonesia's export products supported the sector's growth.

The trade sector also grew favorably by 4.09 percent in the fourth quarter and is projected to grow by 4.85 percent in 2023, driven by the increase in domestic goods trade activity and motorcycle sales.

Amid changes in weather due to the El Nino phenomenon, Indravati said the agriculture sector showed moderate growth of 1.12 percent in the fourth quarter of 2023 and 1.30 percent for the full year of 2023.

Amid moderation in commodity prices, the mining sector also grew strongly at 7.46 percent in the fourth quarter of 2023 and 6.12 percent in 2023. This growth was supported by the metal ore mining sub-sector as demand for processed nickel increased.

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