Bank Indonesia Optimistic That Indonesia's 2024 Economic Growth Can Be Above 5 Percent

Governor of Bank Indonesia (BI) Perry Warjiyo. (Photo: Doc. Bank Indonesia)

JAKARTA - Bank Indonesia (BI) is optimistic that Indonesia's economic growth in 2024 will be above 5 percent, with projections in the range of 4.7 percent to 5.5 percent.

"Optimistic that our growth this year, God willing, can be slightly above 5 percent, which is around 4.7 percent to 5.5 percent. Next year, God willing, it can increase 4.8 percent to 5.6 percent," said BI Governor Perry Warjiyo in Jakarta, quoted from Antara, Thursday, February 1.

In the Seminar Starting Year Forum 2024: Monetary Stability in the Middle of Economic Dynamics 2024, Perry said the thing that should be encouraged to boost economic growth this year is credit growth so that businesses increase, invest and consume.

"God willing, it will be slightly above 5 percent this year, and above 5 percent next year," he said.

This optimism is based on the performance of the Indonesian economy which continues to show improvement. Economic growth in 2023 is estimated to be in the range of 5 percent. According to Perry, current economic performance is one of the best in the world.

Inflation continues to be controlled in the target range, where in 2023 inflation, the Consumer Price Index (JCI) was recorded at 2.61 year on year (yoy), maintained in the target range of three plus minus one percent. This inflation is also one of the lowest in the world.

"God willing, inflation will be controlled to our target of 2.5 plus minus one percent this year and next year," he said.

Indonesia also experienced a trade surplus so that it was able to maintain external resilience. The trade balance surplus continued in December 2023, which was recorded at 3.3 billion US dollars, was influenced by the strong export performance of Indonesia's main commodities, such as coal and iron and steel.

The position of Indonesia's foreign exchange reserves at the end of December 2023 rose to 146.4 billion US dollars, equivalent to financing 6.7 months of imports or 6.5 months of imports and payment of government foreign debt, and being above the international adequacy standard of about three months of imports.

The medium-term economic outlook continues with stability maintained. Indonesia's 2025 economic growth is estimated at 4.8 percent to 5.6 percent and in 2028 it is projected to be 5.3 percent to 6.1 percent.

Inflation in 2024 and 2025 is estimated in the target range of 2.5 plus minus one percent. Credit in 2024 is estimated to grow 10-12 percent and in 2025 it will increase 11-13 percent.

Despite being optimistic, Perry stressed to remain vigilant in observing global dynamics as the world's economic outlook slows down and uncertainty continues.

In 2024, 54 countries held elections so there were political dynamics. Then there was economic fragmentation, where the US economy fell and China slowed down. China's property sector is still not recovering. In addition, there is still geopolitical tension and increasing fiscal pressure.