JAKARTA - Bank Mandiri economist Dendi Ramdani explained three factors that could make the Indonesian economy grow higher than the projection of the International Monetary Fund (IMF).
The economist, who serves as Head of the Department of Industrial and Regional Research (Department Head of Industry and Regional Research) of Bank Mandiri, has greater potential and has the opportunity to increase from the IMF projection.
This is because, first, capital increases consumption with a large and more population of productive age in Indonesia than in unproductive age.
The IMF previously stated that Indonesia is projected to be ranked 7th in the world for the largest GDP countries adapted to purchasing power parity (PPP).
"This productive age population is a power that has the potential to drive economic growth, combined with capital and technology forces," he said, quoting Antara.
Dendi assessed that the population of productive age is a consumption force that must be maintained in terms of purchasing power and spending, so that demand for goods and services can increase, then can move the production side.
Meanwhile, according to the IMF, Indonesia is projected to have GDP in 2025 according to PPP of US$4.98 trillion or ranked seventh in the world after China, the United States, India, Russia, Japan, and Germany.
The second factor so that the Indonesian economy can grow higher, said Dendi, is the optimization of natural resources in the energy, mining, plantation, agriculture and fisheries sectors.
He said that natural resources are the strength to become a resource for development in increasing economic growth.
The third factor, according to Dendi, is the quality of government institutions and governance which still has many opportunities to improve.
"The next one could have an impact on creating a conducive investment climate and business to encourage investment and business activities," he said.
He said that if government institutions and governance were better, then Indonesia's economic growth would certainly grow even higher according to the target of Indonesian President Prabowo Subianto, which was up to 8 percent.
"In a situation of institutional quality and governance that is not good, Indonesia can grow 5 percent," said Dendi.
Dendi explained that the Prabowo administration period and the conditions for the next 15-20 years, are the keys for Indonesia to be able to grow higher and become a developed country.
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"In the next 15-20 years, Indonesia needs to accelerate the increase in economic growth, accelerate improving the quality of human resources, quality of technology adoption and development, and improving the quality of institutions," he said.
According to Dendi, this acceleration needs to be done because after the next 20 years, Indonesians who are now entering productive age have begun to age.
"This condition will obviously be risky because Indonesia can be trapped into the middle income trap," he said.
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