Indonesia Secures Strong Economic Position Amid Global Challenges: 2024's Achievements and 2025 Projections

Jakarta, INTI - As 2024 progresses, Indonesia's economy continues to demonstrate robust growth and stability, driven by increased competitiveness and effective government initiatives. The nation's structural reforms have been successful, aligning with positive assessments from international rating agencies. Notably, the latest assessment from S&P, which complements all Sovereign Credit Ratings, shows that Indonesia's economy remains one notch above the Investment Grade Level. Projections for global economic growth in 2025 also indicate a slight improvement compared to 2024, with inflation rates beginning to decline.

"The extreme poverty rate continues to decline, reaching 0.83% as of March 2024, nearing the target of 0% by the end of 2024. Additionally, the unemployment rate decreased to 4.82% in February 2024, with the number of employed individuals increasing by 3.55 million from February 2023 to February 2024," said Coordinating Minister for Economic Affairs Airlangga Hartarto during a press conference on the 2025 State Budget and Financial Note at the Directorate General of Taxes Headquarters in Jakarta, Friday (16/08).

Even with the ongoing uncertainty in the global economy, Indonesia's economy has shown remarkable resilience, supported by strong and relatively high growth compared to other countries. In the second quarter of 2024, Indonesia's economy grew by 5.05% (yoy), outperforming many nations such as China (4.7%), Russia (4%), Singapore (2.9%), the United States (2.8%), Italy (0.9%), and the European Union (0.75%). The inflation rate in Indonesia as of July 2024, recorded at 2.13% (yoy), was within the target range of 2.5% ± 1% and lower than the rates in countries such as Iran (32.23%), Laos (26.11%), Pakistan (11.10%), Belgium (3.65%), and South Korea (2.55%).

"Trade surpluses have continued, with a surplus of USD 472 million in July, marking 51 consecutive months of surplus since May 2020," Menko Airlangga reported.

During the press conference, Menko Airlangga outlined several strategies the government will implement to maintain strong economic fundamentals. These strategies include revitalizing traditional economic engines through flagship programs such as the Pre-Employment Card, the Job Creation Law, National Strategic Projects (PSN), Special Economic Zones (KEK), and accession to the OECD and CPTPP. Additionally, the government is focused on developing new economic engines by leveraging digitalization, AI utilization, preparing digital talent, developing data centers, transitioning to renewable energy, downstream industry development, strengthening the electric vehicle (EV) ecosystem, and initiating the semiconductor industry.

"Moreover, we are continuing efforts in social protection and community empowerment through programs like KUR, free nutritious lunch programs, and school rehabilitation," Menko Airlangga added.

Menko Airlangga also emphasized the importance of four key assets that will continue to support economic growth: physical capital, human capital, natural capital, and social capital. These objectives will be achieved by improving connectivity through the development of transportation and logistics infrastructure, enhancing governance to build more holistic human resource capacity, promoting worker protection, optimizing incentives for a greener energy transition, and increasing compliance and transparency in climate-related disclosures. The government's commitment to optimizing social protection and community empowerment frameworks, coupled with institutional quality improvements supported by national resilience and political stability, will further strengthen Indonesia's economy.

"The 2025 State Budget and Government Work Plan (RAPBN and RKP) adopts the theme of accelerating inclusive and sustainable economic growth," concluded Menko Airlangga.

Attending the press conference were the Minister of Education, Culture, Research, Technology, and Higher Education, the Minister of Health, the Minister of Finance, the Minister of National Development Planning/Head of Bappenas, the Deputy Minister of Agriculture, the Secretary General of the Ministry of Public Works and Public Housing, and the Assistant Chief of Police for General Planning and Budgeting.