BI Disburses INDONESIAN Economic Driven Factors

Rupiah (photo: Antara)

YOGYAKARTA Bank Indonesia (BI) revealed a number of factors that encourage optimism for economic growth throughout 2025, which is expected to be above the midpoint of the range of 4.6 to 5.4 percent.

Director of the BI's Department of Economic Policy & Monetary, Juli Budi Winantya said that one of the main factors driving this growth is investments that are expected to continue to grow strongly.

"The year 2025 will still grow in the range of 4.6 percent to 5.4 percent. There is a slight explanation there, it is above the midpoint of 4.6 percent to 5.4 percent. The driving force for investment will still grow strong," he said in BI policy activities to Maintain Stability and Drive Growth, Friday, August 22.

Juli added that the positive investment outlook is in line with the improvement in export performance which is also projected to increase.

He highlighted the US reciprocal rate of 19 percent against Indonesia, which is relatively lower than other countries, thus providing encouragement for national exports.

"So we hope that this will support exports and as a follow-up is an investment that is also expected to increase," he said.

In addition, from a fiscal point of view, he conveyed that the acceleration of government spending is also expected to be a supporting factor for economic growth until the end of 2025 in order to achieve the set target.

Juli emphasized that in order to support high economic growth, Bank Indonesia has taken various steps, including cutting the BI Rate interest rate five times since September 2024 with a total decline of 125 basis points, so interest rates are now at the 5 percent level, which is the lowest level since 2022.

In addition, BI continues to maintain the stability of the rupiah exchange rate amid global uncertainty through intervention in the Offshore Non Delivery Forward (NDF) market, the NDF domestic market, and the spot market.

BI has also purchased Government Securities (SBN) worth IDR 186 trillion, not including the debt switching program, and providing liquidity incentives to banks to channel credit to priority sectors that support Asta Cita, with total lending reaching IDR 384 trillion.

Furthermore, BI is expanding the use of inter-state QRIS which was previously implemented in Malaysia, Singapore, Thailand and Japan, now plans to continue digitizing QRIS with China and Saudi Arabia, focusing on transactions using local currencies.

As for now, transactions using local currencies have reached a value equivalent to 4-5 billion US dollars with Japan and 6-7 billion US dollars with China.