Despite Global Uncertainty, Indonesia's Economy Is Projected To Grow 5 Percent To 2024

JAKARTA - Bank Mandiri Chief Economist Andry Asmoro estimates that the Indonesian economy will grow by 5 percent in 2024.

According to Asmo, a stronger growth momentum is expected to occur in the fourth quarter of 2024. Indonesia's GDP is expected to grow 5.0 percent (yoy) in that quarter, experiencing a slight increase compared to 4.9 percent (yoy) in the third quarter of 2024.

"In a quarterly manner, growth is estimated at 0.5 percent (qoq), reflecting Indonesia's economic resilience despite increasing global uncertainty," he said in his statement, Tuesday, February 4.

Asmo said that one of the factors that is expected to be the main driver of Indonesia's economic growth is net exports because of its strong export performance, even though global uncertainty is increasing, it is still believed that it will make a positive contribution to economic growth.

In addition, Asmo said that government spending is expected to return to normal in the fourth quarter of 2024, with a growth of 4.3 percent (yoy), slightly lower than 4.6 percent (yoy) in the third quarter of 2024. This decline was caused by the high base effect from the previous year.

In terms of investment, Asmo said that the Gross Fixed Capital Formation (PMTB) is expected to experience moderate growth, with lower growth in the fourth quarter of 2024, which is 4.9 percent (yoy), compared to the third quarter of 2024 of 5.2 percent (yoy).

According to him, this is expected to happen because companies had made early capital expenditures in the previous quarter to optimize use at the end of the year.

Asmo said household consumption, although it is estimated that it will slow down a bit, remains the main pillar of Indonesia's economic growth. Meanwhile, consumption is expected to grow 4.8 percent (yoy) in the fourth quarter of 2024, slightly decreasing compared to the third quarter of 2024 of 4.9 percent (yoy).