Indef Says Indonesia's Economy In The First Quarter Of 2024 Could Be Higher

Rupiah (Photo: Antara)

JAKARTA - The Institute for Development of Economics and Finance (Indef) assesses that Indonesia's economic growth in the first quarter of 2024 should be able to grow higher than 5.11 percent because of the many momentums that can boost economic growth.

Macroeconomic and financial researcher Indef Riza Annisa Pujarama said Indonesia's economic growth should be more optimal because there are many factors that can encourage such as the momentum of Ramadan, elections and distribution of social assistance.

However, Riza saw that the government's high consumption growth was only 19.90 percent, contributing only to economic growth by 6.25 percent. Meanwhile, the consumption of Non- Profit Institutions that Serve Households (LNPRT) grew 24.29 percent, only contributing 1.43 percent to economic growth.

Meanwhile, household consumption growth only reached 4.91 percent and contributed quite high at 54.93 percent. Therefore, Riza assessed that people's purchasing power decreased in the first quarter of 2024.

"But the share in forming GDP (gross domestic product) is according to expenditure, from low government consumption and LNPRT consumption, so the growth is still limited. If people's purchasing power is still fine, it should be able to boost more than 5.11 percent should be," he said in a virtual discussion held by Indef, Tuesday, May 7.

According to Riza, during the Ramadan period yesterday, there was a decrease in purchasing power on clothing, footwear and maintenance services, even though the sector should have increased at that momentum.

Riza sees a decrease in the purchasing power of public consumption as reflected in the state revenue from the domestic value added tax (VAT) in a net type of tax experiencing a contraction of 23.8 percent in the first quarter of 2024.

In addition, Riza added that middle class people who cannot get social support from the government also hold back their consumption. Those who don't get social assistance, so they will automatically hold back their consumption," he said.