Indef Economist Reveals Reasons For Economic Growth Difficult To Reach 8 Percent

JAKARTA - Senior Economist of the Institute for Development of Economics and Finance (Indef) Didik J Rachbini estimates that economic growth in 2024 and 2025 will stagnate in the range of 5 percent and will be difficult to reach 8 percent.

"Indef has predicted this year's growth rate and it is predicted that next year it will stagnate by 5 percent," he explained in his statement, quoted on Friday, December 27.

According to Didik, economic growth in 2024 and 2025 will stagnate because so far there has been no policy strategy that has succeeded in releasing the industrial sector from the early deindustrialization trap, which is reflected by the Purchasing Managers' Index (PMI) sloping into the contractive zone or below 50.

"With the industrial sector being ignored without a meaningful policy like this, is it appropriate for us to expect an 8 percent growth?," he explained.

Didik said that the growth of the industrial sector has grown low, so far in a few years it has only been around 3-4 percent.

"This shows inadequate performance to achieve growth above 5 percent, especially 7 percent like Jokowi's target or the target of 8 percent in the Prabowo Subianto government," he said.

According to Didik, if industrial growth is as low as it is today, then forget the high target. Where during the Jokowi administration this sector was ignored so that the 7 percent growth target was severely missed.

Didik said that the Indonesian industrial sector is currently trapped in an early deindustrialization process, so it must be overcome through the abundant Indonesian natural resource-based industrialization (SDA).

This is important to compete and win international markets, which in turn will ensure success in the domestic market.

Didik said that this strategy has proven successful in industrial countries based on natural resources, export-oriented industries, or industries that have an outward looking industry.

"This industrial strategy was carried out by the Indonesian government in the 1980s and in the early 1990s with results that could encourage economic growth of 7-8 percent," he said.

According to Didik, without this kind of strategic change, it is impossible to achieve the 8 percent growth target.

Therefore, the industrial strategy that is able to compete in the international market is the key to the success of achieving this economic growth target.