Bank Mandiri Predicts Indonesia's Economy To Grow 5.06 Percent Next Year

Rupiah illustration (Photo: dock. Antara)

JAKARTA - PT Bank Mandiri Tbk (Persero) (BMRI) estimates that Indonesia's economic growth in 2024 will be at the level of 5.06 percent driven by a number of factors such as the benchmark interest rate and the still positive consumption segment.

Bank Mandiri Chief Economist Andry Asmoro said that if the Federal Reserve lowers US interest rates more quickly, global sentiment will improve and the potential for the return of foreign funds in the future will be more open.

"In line with that, Bank Indonesia has the opportunity to virtually reduce interest rates by 50 bps in 2024," he explained at the 2023 Summary Mandiri Economic Outlook, Tuesday, December 19.

Andry said the decline in interest rates would have a positive impact on the economy where the Indonesian economy would still record healthy growth at 5.04 percent in 2023 and 5.06 percent in 2024.

According to Andry, this is in line with the IMF's estimate that the Indonesian economy in 2023 and 2024 will still grow in the range of 5 percent. In addition, consumption and activities of the domestic community are expected to remain solid, so that it can encourage Indonesia's economic growth until 2024.

However, Indonesia's economy will still face the risks of the global economic slowdown and the high uncertainty during the period of holding the National Election.

"The global economic slowdown has led to a decline in exports, but the trade balance performance is still recording a surplus," he explained.

Meanwhile, during the period January to November 2023, the trade balance surplus was recorded at 33.6 billion US dollars, a decrease compared to the surplus in the same period last year of 50.5 billion US dollars.

With the performance of the trade balance, Andry conveyed that Indonesia's Transaction Balance (NTB) or Current Account Balance during 2023 is expected to record a small deficit of 0.2 percent of GDP.

Andry said that in the future, Indonesia will still face various global economic risks, and the US interest rate seems to have reached its peak but the timing for the reduction in interest rates is still uncertain.

According to Andry, the slowdown in China's economy will still be a risk to the Indonesian economy considering that China is one of Indonesia's main trading partners and investment partners.