Airlangga Reveals 3 Growth Machines For The Indonesian Economy

Coordinating Minister for Economic Affairs (Menko) Airlangga Hartarto. (Photo: Doc. ANTARA)

Coordinating Minister for Economic Affairs Airlangga Hartarto said there were three driving machines in improving the Indonesian economy, namely downstreaming, infrastructure development, and international cooperation in food security.

The following are things that we will continue to develop in the future, namely three growth machines. One of them is conventional, downstreaming. We have done a lot of Downstreaming. Including nickel minerals. And also through infrastructure projects, national strategic projects. Then of course international cooperation and food security," said Airlangga in his statement, Tuesday, July 23.

Airlangga said that in the second half of 2024, the consumption sector will remain a strong growth driver. Government policies regarding price stability and social protection programs will also support this growth.

In addition, Airlangga said that the real sector also grew strongly where Indonesia's Manufacturing PMI was expansive for 34 consecutive months as well as the external sector, namely the trade balance which continued to show a surplus for 50 consecutive months.

The fiscal macro performance where the tax ratio has consistently grown by double digits since 2022 is accompanied by a fiscal deficit that is maintained below 3 percent of GDP after COVID-19. Meanwhile, the financial sector, namely credit growth and DPK, shows an increasing trend and bank credit growth is above 11 percent this year.

Airlangga said that Indonesia this year also reached an important milestone by climbing to 27th place from the previous rank 34 in the global competitiveness rankings.

All major rating institutions have also maintained Indonesia at the level of investment grade.

One of our main drivers is infrastructure. Then business efficiency, government efficiency, and economic performance. One of the things that we also strengthen is in the labor market. And the labor market, in fact, we are number two from all over the country. That's because we introduced the Job Creation Act," said Airlangga.

Airlangga explained, related to the vision of Indonesia Gold 2045 where Indonesia aims to achieve a nominal GDP of 9.8 trillion US dollars and is among the five countries with the top economies globally.

This goal requires a transformative approach, focusing on science and technology, innovation, a green economy, digital transformation, and economic integration.

Airlangga said the Government continues to be committed to supporting the wider technology and manufacturing sectors, including by developing industries related to semiconductor components such as the production of electric vehicle (EV) components.

"Indonesia is also committed to emission reduction and energy transition initiatives, one of which is through the Asian Zero Emission Community (AZEC) which has provided funding for several projects in Indonesia such as geothermal power plants, land conservation, and solar panels," he explained.

Airlangga said Indonesia is also taking advantage of the wide market potential and investment of participation in various international cooperation forums such as ASEAN, G20, RCEP, IPEF, EURASIA, CP-TPP, Indonesia's relations with EU, and including accession to become an OECD member.