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The govt has prepared strategies to maintain growth prospects and mitigate challenges
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ndonesia’s economy is experiencing good growth and has recovered from the COVID-19 pandemic despite a challenging global situation.
The growth was underpinned by strong household consumption, which grew 5.06 percent year-on-year (yoy) and an investment increase of 5.77 percent yoy in the third quarter of 2023. Two sectors, transportation and tourism, experienced growth of 14.7 percent and 10.9 percent yoy, respectively, also in the third quarter of 2023.
“Our inflation rate could be controlled well thanks to strong coordination among related institutions. Every week we trace commodity prices in every region, including how they maintain the logistics cost in the respective regions. We learned from the COVID-19 pandemic how to make every regency and municipality competitive in coping with the pandemic, as we did for inflation,” said Coordinating Economic Minister Airlangga Hartarto during the launch of the 2023 December Edition of Indonesia Economic Prospects (IEP) in Jakarta on Dec.13.
The theme ‘Climate Action for Development’ was raised in the report and aligned with Indonesia’s commitment to drive strong, socially inclusive and environmentally friendly economic growth. The launch of the report is also expected to serve as a platform for discussing various ideas and concepts help Indonesia become more advanced and prosperous.
“While striving to promote domestic demand, we are aware and on the alert for global challenges that can disrupt the national economy. Therefore, to maintain growth prospects and mitigate all of the challenges ahead, we have prepared a series of strategies,” Airlangga explained.
For the short-and-middle term, the government will increase household consumption, encourage investment and accelerate exports, which will be implemented through strong coordination between the fiscal, monetary and real sectors. These included asking the Central Inflation Control Team (TPIP) and the Region Inflation Control Team (TPID) to implement a policy mix and make a strong coordination, which has successfully controlled inflation.
“We have also followed up the Presidential Instruction No. 24, 2023 concerning the National Export Acceleration Task Force by strengthening export supply, diversifying the export market, strengthening financing and international cooperation and expanding the export market for micro, small and medium enterprises (MSMEs),” Airlangga said.
Regarding the long term, 2024 will become a crucial foundation prior to the implementation of the 2025-2045 National Long-Term Development Plan (RPJPN). A transformative development approach will be adopted to achieve Indonesia’s 2045 Golden Vision.
Furthermore, the government will continue with a series of policy strategies to enhance sustainability through the energy transition, the development of the electronic vehicle (EV) ecosystem and the development of carbon storage capabilities. Productivity will be boosted through digital innovation, structural reform and transformation, accelerating infrastructure on connectivity projects, enhancing the institution quality, implementing the Job Creation Law and further advancing industrialization.
“We are also optimistic about the positive step regarding the access to Indonesia’s membership in the Organisation for Economic Co-operation (OECD). The membership will bring several benefits, which include enhancing reputation and transparency, a high policy standard and restoring investor confidence in Indonesia so we can achieve our target of escaping the middle-income trap,” Airlangga concluded.
Attending the event were the macro and finance deputy for the Office of the Coordinating Economic Minister, the infrastructure and transportation deputy for the Office of the Coordinating Maritime Affairs and Investment Minister, the World Bank’s country director for Indonesia and Timor-Leste, the Australian ambassador to Indonesia, Singapore’s ambassador to Indonesia, the Bank Mandiri chief commissioner, the lead economist for World Bank Indonesia, the deputy head of the Indonesian Chamber of Commerce and Industry (Kadin) for maritime, investment and foreign affairs.
This article was published in collaboration with Coordinating Ministry for Economic Affairs Republic of Indonesia
