Despite Slowing, Household Consumption Supports Economic Growth in Q3-2024

Rupiah (Photo: antara)

JAKARTA - The Central Statistics Agency (BPS) reported that economic growth in the third quarter of 2024 was 4.95 percent year on year (yoy) or slowed down when compared to economic growth in the first and second quarters of 5.11 percent and 5.05 percent (yoy) respectively.

"Indonesia's economic growth in the third quarter of 2024 when compared to the third quarter of 2023 or year on year grew by 4.95 percent," said Acting Head of the Central Statistics Agency (BPS) Amalia Adininggar Widyasanti in a press conference, Tuesday, November 5.

Amalia explained that Indonesia's gross domestic product or GDP based on current prices in the third quarter of 2024 reached IDR 5,638.9 trillion. Also, GDP based on constant prices reached IDR 3,279.6 trillion.

Amalia said that household consumption was the main contributor to Indonesia's economic growth in the third quarter of 2024 with a contribution of 2.55 percent.

Amalia explained that household consumption growth was driven by increased consumption for restaurants and hotels, as reflected in the increase in hotel room occupancy rates and domestic tourist travel.

Then, the transportation and communication sector also grew strongly, as reflected in the increase in motorcycle sales and rail, sea, and air passengers.

In addition to household consumption, economic growth in the third quarter of 2024 was also supported by investment, which also made a significant contribution. Gross Fixed Capital Formation (PMTB) contributed 1.63 percent to economic growth and government consumption provided a source of growth of 0.32 percent.

Meanwhile, this investment was driven by the development of infrastructure projects carried out by the government and the private sector, including the continued development of the Indonesian Capital City (IKN) and other construction projects, such as the construction of toll roads.

"The increase in the realization of government capital expenditure and the increase in imports of capital goods, especially types of machinery and other equipment," she added.

In addition, the export sector grew driven by an increase in the value and volume of exports of several main commodities such as mineral fuels, machinery and electrical equipment, and vehicles and their parts. Exports were also driven by an increase in foreign tourist visits.

Meanwhile, Amalia said that there were five major drivers of Indonesia's economic growth according to business fields, driven by the processing industry, agriculture, trade, construction, and mining.

"The total share of these five business sectors is 64.94 percent of GDP," she said.

Amalia said the processing industry grew by 4.72 percent (yoy), while the agricultural industry grew by 1.69 percent (yoy), the trade industry grew by 4.82 percent (yoy), construction grew by 7.48 percent (yoy) and mining by 3.46 percent (yoy).

In addition, the business sector with high growth is transportation and warehousing which grew by 8.64 percent (yoy) in line with the increase in the number of passengers for all modes of transportation and the increase in shipping goods.

Then the accommodation and food and beverage industry grew by 8.33 percent (yoy), driven by the increase in the number of foreign tourist visits, MICE activities and national and international scale events, such as Moto GP Mandalika, PON XXI, and the International Sustainability Forum.