BI Governor Perry Warjiyo Targets Indonesia's Economic Growth Of 5.6 Percent In 2025

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

JAKARTA - Bank Indonesia (BI) Governor Perry Warjiyo projects that Indonesia's gross economic growth or domestic product (GDP) will be in the range of 4.8 percent to 5.6 percent by 2025.

For the macro 2025 assumption, BI also views the average rupiah exchange rate against the US dollar to be in the range of Rp. 15,300 to Rp. 15,700 per US dollar. Meanwhile, national inflation in 2025 is estimated to range from 1.5-3.5 percent.

"The global economic condition is erratic, there are many dynamics and challenges, of course it will have an impact on the Indonesian economy this year and also the next year. Bank Indonesia emphasizes the five main risks," Perry said in Jakarta, quoted from Antara, Wednesday, June 5.

This was conveyed by Perry in the Commission XI Working Meeting of the DPR RI regarding the discussion of basic assumptions in the preliminary discussion of the Draft State Revenue and Expenditure Budget (RAPBN) for Fiscal Year 2025.

The meeting was also held together with the Minister of Finance, Minister of National Development Planning, Board of Commissioners of the Financial Services Authority, and Hearing Meetings with the Central Statistics Agency (BPS).

The macro 2025 assumption is based on considering five main risks that can have an impact on national economic growth, the rupiah exchange rate and domestic inflation.

The five risks are global economic growth that is slowing, commodity prices are volatile, the Fed Funds Rate (FFR) benchmark interest rate that lasts at a high level for a long time, the strong US dollar, and global inflation that has fallen very slowly.

Meanwhile, for 2024, BI estimates that economic growth is in the range of 4.7 percent to 5.5 percent, the rupiah exchange rate is in the range of IDR 15,700 to IDR 16,100 per US dollar, and domestic inflation is around 1.5 percent to 3.5 percent.

Furthermore, Perry said that global economic growth was not only stagnant but also slowing down. Indonesia's main trading partner countries experienced slowing economic growth, such as the United States and China.

"The condition of global economic growth will of course affect the sources of growth from exports that require hard work so that they can support growth," he said.

On the other hand, commodity prices also have an impact on global inflation which has decreased very slowly. This condition will also have an impact on efforts to control domestic inflation both related to oil prices and food prices.

While BI estimates FFR will drop by the end of 2024 around 25 basis points (bps), and around 52 bps in the first half of 2025.

The US dollar is also still strong, thus putting pressure on currency exchange rates around the world, including the rupiah.

In addition, global geopolitical risks are also high, so it is necessary to maintain the flow of capital to continue to enter the country in order to maintain stability.