Indonesia's Economy Must Grow 5.6 Percent In 2025 In Order To Achieve The 2029 Target

Illustration. (Photo: Doc. Antara)

JAKARTA - Chief Economist of PT Bank Mandiri (Persero) Tbk Andry Asmoro views that Indonesia's gradual economic growth should grow by 5.6 percent this year, if it is to achieve the 8 percent economic growth target by 2029.

If Indonesia misses 5.6 percent economic growth this year, Andry warns that pursuing growth in the following year will be more difficult.

"Our calculation is that if we want to get growth up to 8 percent, gradually Indonesia must grow 5.6 percent this year," Andry said at the 2025 Economic Outlook event in Jakarta, quoted by Antara, Tuesday, February 4.

However, said Andry, Indonesia's economy is 'naluriah' recently only growing flat in the range of 5 percent. So far, he has not seen the potential for economic growth that is far above 5 percent. So, according to projections, the Indonesian economy is estimated to grow between around 5 percent for 2024.

Tomorrow BPS data will be released regarding Indonesia's economic growth in the fourth quarter (2024). I think up to our calculations this morning, it was a bit difficult to actually see Indonesia's potential to be far from 5 percent," he said.

Even so, Andry still looks positively at the 8 percent economic growth target launched by President Prabowo Subianto. According to him, Indonesia must grow above 5 percent so as not to be abandoned by investors.

If we don't grow or only grow in the range of 5 percent, we will be left by investors. Because now the narrative for investors is where the places that produce relatively better economic growth. The era of chip money has also been relatively passed now. Investors will be more very specific in assessing the potential of a country," he said.

Andry believes that Indonesia will not experience a crisis, except in the last few years due to the COVID-19 pandemic. Indonesia's economic growth will also remain relatively good, mainly supported by strong public consumption in every period of the National Religious Holiday (HKBN), namely Ramadan and Eid al-Fitr and Christmas and New Year (Nataru).

From a sectoral perspective, Andry said that not all sectors in Indonesia are actually Gloomies. In this case, sectors that always have the potential to grow are domestic-based sectors such as telecommunications, health services, as well as manufacturing industries and other related sectors.

Then, there are sectors that have the potential for moderate opportunity growth, including food and beverage (food and beverage), utilities (utilities), and government services.

"The big question is where do Indonesians have the money and where do they run. There are actually two big crunchs which then are Indonesians when shopping for the sector. The first is going to the restaurant, the second is to the supermarket. So this supermarket and restaurant are the proxys of food and drinks," said Andry.

He said lower middle class groups have a tendency to prioritize shopping or buy basic necessities. However, interestingly, lifestyle consumption in the upper middle class shows an increasing trend.

Lifestyle, skincare, beauty care is also increasing. That's why this then answers the decoupling of consumption patterns in the people in Indonesia. If we can encourage this to become a fairly large ecosystem, demand (demand) is there, we just have to see how it is then the conveniences so that the ecosystem works," said Andry.