Indonesia's Economic Growth Defies Global Uncertainty, Maintaining Strong Resilience in 2024

Jakarta, INTI - As we enter the second half of 2024, Indonesia's economic growth continues to show optimism and consistency, bolstered by increased competitiveness supported by business efficiency and government efforts. This reflects the success of structural reforms and aligns with assessments from various international rating agencies, which still view Indonesia's economy as attractive. The latest assessment from S&P, complementing the results of all Sovereign Credit Ratings, shows that Indonesia remains one notch above Investment Grade Level. The global economic growth projection for 2025 is also expected to improve slightly compared to 2024, with inflation rates beginning to show a decline.

"The extreme poverty rate continues to decline to 0.83% as of March 2024, approaching the target of 0% by 2024. Furthermore, the unemployment rate has also fallen to 4.82% in February 2024, and the number of employed individuals increased 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, Jakarta, on Friday (16/08).

Despite the global economy being clouded with high uncertainty, Indonesia's economy still demonstrates strong resilience, supported by robust and relatively high growth compared to other countries. In the second quarter of 2024, Indonesia's economy continued to grow strongly at 5.05% (yoy), performing better than many other countries such as China (4.7%), Russia (4%), Singapore (2.9%), the United States (2.8%), Italy (0.9%), and the European Union (0.75%). Indonesia's inflation rate in July 2024, recorded at 2.13% (yoy), also remained within the target range of 2.5% ± 1% and was lower than in countries like Iran (32.23%), Laos (26.11%), Pakistan (11.10%), Belgium (3.65%), and South Korea (2.55%).

"Trade surpluses also continue, with a surplus of USD 472 million in July, marking the 51st consecutive month of surplus since May 2020," Menko Airlangga stated.

On this occasion, Menko Airlangga highlighted several government strategies to maintain strong economic fundamentals, including revitalizing the conventional economic engine through key 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 aims to develop a new economic engine through digitalization, AI utilization, digital talent preparation, data center development, energy transition, downstream industry development, strengthening the EV ecosystem, and initiating the semiconductor industry.

"Of course, we are still carrying out activities in the fields of social protection and community empowerment through the KUR program, nutritious free lunch programs, and school rehabilitation," added Menko Airlangga.

Furthermore, Menko Airlangga emphasized four key assets for economic growth that will continue to be maintained: physical capital, human capital, natural capital, and social capital. This can be achieved through enhanced connectivity via transportation and logistics infrastructure development, improved governance for more holistic human resource capacity building, promoting protection for all workers, optimizing incentives for a more environmentally friendly energy transition, and increasing compliance and transparency in carbon-related disclosures. These efforts are further supported by the optimization of the social protection and community empowerment framework, as well as institutional quality improvements backed by national resilience and political stability.

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

Accompanying the event 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.