Sri Mulyani The Value Of The Indonesian Economy Grows Strong And Stable Throughout 2024

Minister of Finance Sri Mulyani Indrawati. (Photo: Doc. ANTARA)

Minister of Finance Sri Mulyani Indrawati said that despite being faced with global and domestic challenges, the Indonesian economy posted strong and stable growth.

As for the fourth quarter of 2024, Indonesia's economy grew 5.02 percent or 5.03 percent for the entire year 2024.

This achievement is driven by increased investment and manufacturing activity, as well as supported by maintained domestic demand and global demand that is starting to recover.

"The year 2024 is a year full of challenges and dynamics, both globally and domestically. However, thanks to hard work, solid synergy, and the strategic role of the State Budget as an instrument in guarding the Indonesian economy, we are able to maintain stability and growth until the end of 2024," he said in his statement quoted on Thursday, February 6.

In terms of spending, household consumption grew 4.98 percent in the fourth quarter of 2024, overall reaching 4.94 percent throughout the year.

Sri Mulyani said that maintaining public consumption is supported by controlled inflation and increasing community mobility.

"This increase is reflected in the increase in hotel occupancy and the number of passengers in various modes of transportation," he explained.

Sri Mulyani conveyed that the APBN maintains people's purchasing power, among others, through spending on social assistance for low-income groups and strengthening food supply distribution for price stability.

In addition, the creation of new jobs which reached 4.79 million in 2024 also encourages public consumption.

Meanwhile, consumption of Non-Profit Institutions that Serve Households (LNPRT) in the fourth quarter of 2024 grew 6.06 percent and 12.48 percent throughout 2024.

Sri Mulyani said that this increase was driven by activities related to holding the 2024 simultaneous elections and regional elections, as well as various sporting events.

Throughout 2024, Government consumption grew 6.61 percent with a growth of 4.17 percent in the fourth quarter.

Sri Mulyani explained that this excellent performance was reflected in the increasingly optimal role of state spending as a shock absorber to maintain public consumption, maintain economic stability, and support development agendas.

"The realization of state spending provides a multiplier effect for the economy, both for business activities and public consumption through basic needs such as health, education, and social welfare," he explained.

In addition, Gross Fixed Capital Formation (investment) grew 5.03 percent in the fourth quarter and 4.61 percent throughout 2024.

According to him, this growth performance continues a consistent strengthening trend in the last four years where economic-political stability as well as financial and monetary policy support have been able to increase investor confidence and investment realization in various sectors, including downstreaming.

Sri Mulyani said this can be seen from the realization of PMA and PMDN which grew 20.82 percent with a total value of Rp1,714 T, more than the target set.

"The growth of imports of capital goods and raw materials also provides indications of maintained manufacturing performance," he said.

Through the APBN, Sri Mulyani said that the Government helped encourage investment by increasing capital expenditures for construction as well as building connectivity infrastructure, dams, industrial estates and tourism.

The export performance in the fourth quarter of 2024 grew 7.63 percent and on an annual basis grew 6.51 percent.

Sri Mulyani said that positive export growth in 2024 was supported by the increase in exports of goods and exports of services.

"The increase in exports of goods was mainly driven by an increase in exports of steel and mineral fuel commodities, which grew by 17.8 percent and 7.8 percent, respectively," he said.

On the other hand, the growth in service exports was supported by an increase in foreign tourist visits to Indonesia, which grew 19.05 percent. Meanwhile, goods imports still contracted by 10.36 percent in the fourth quarter of 2024 and by 7.95 percent on an annual basis.

Meanwhile, the Manufacturing sector in the fourth quarter of 2024 grew 4.89 percent and 4.43 percent throughout 2024.

Sri Mulyani conveyed that strong domestic and global demand remains a support for growth, especially in the sub-sectors of the basic metal, electronics and food and drink industries.

In line with the growth in the manufacturing sector, the trade sector grew 5.19 percent in the fourth quarter or grew 4.86 percent throughout 2024 and this growth was driven by an increase in production activity.

The sectors related to community mobility recorded significant growth throughout 2024, namely the transportation sector grew 7.92 percent in the fourth quarter and reached 8.69 percent throughout 2024.

In line with that, the Accommodation and Drinking Sector also grew high, at 6.61 percent in the fourth quarter and 8.56 percent throughout 2024.

Sri Mulyani said that this momentum was driven by the implementation of national and international events as well as the improvement of tourism supporting infrastructure which increased the flow of tourists from both domestic and foreign.

Meanwhile, the primary sector is experiencing moderation, both from the agricultural sector and the mining sector.

The agricultural sector grew 0.71 percent in the fourth quarter or 0.67 percent in total in 2024.

Sri Mulyani conveyed that the weakening of the performance of the agricultural sector was due to a decline in rice and palm oil production.

However, the performance of the agricultural sector is expected to increase in line with food self-sufficiency policies and the Free Nutrition Food (MBG) program.

Meanwhile, the mining sector also grew moderately by 3.95 percent in the fourth quarter or 4.90 percent for 2024.

According to him, moderate commodity prices are one of the factors in slowing down the growth of the mining sector.

Spatially, all regions grew positively throughout 2024 where the Java and Sumatra regions remained the main contributors to economic growth with growth of 4.92 percent and 4.45 percent, respectively.

The manufacturing, trade, and development activities consistently support economic growth in the Java and Sumatra regions.

Meanwhile, downstream activities supported high growth in Eastern Indonesia where Maluku-Papua and Sulawesi grew by 7.81 percent and 6.18 percent, respectively.

The development of basic and supporting infrastructure is the driving force for construction activities in Kalimantan so that it recorded growth of 5.52 percent.

Tourism activity grew strongly capable of supporting economic growth in the Bali and Nusa Tenggara regions to grow by 5.04 percent.

Sri Mulyani said that the resilient performance of the national economy cannot be separated from the hard work of the state budget. The state budget continues to be optimized to maintain people's purchasing power through the alignment of social protection programs (Perlinsos), support the national economy, and carry out national development agendas.

"In order to maintain people's purchasing power, the Government will continue to strengthen the Perlinsos program, such as PKH, Basic Food Cards, as well as Subsidies and Compensation," he said.

Sri Mulyani said that the increase in MSME capacity would be carried out through the KUR program and tax facilities.

Meanwhile, efforts to maintain price stability will be carried out through food price stabilization (SPHP).

In the future, Sri Mulyani conveyed that the role of the APBN as a shock absorber will continue to be optimized through various government policy strategies.

Continuation of efforts to strengthen economic fundamentals continues, including through economic transformation, strengthening food security, developing renewable energy, downstreaming, increasing labor productivity, and improving the investment and business climate.

"The government also continues to strengthen collaboration, coordination, and synergy to optimize the impact of policies on the economy and the welfare of the community, through the collaboration of fiscal, monetary and financial policies," he concluded.