s of the end of 2024, Indonesia's economy remains solid, demonstrated by a growth rate still above 5 percent, with a cumulative growth rate of 5.03 percent as of the third quarter (Q3) of the year. This is accompanied by controlled inflation, within the target range of 2.5 percent ±1 percent, with November 2024 inflation at 1.55 percent year-on-year (yoy). Household consumption also continues to grow strongly and is expected to increase to above 5 percent this year.
Additionally, the strong purchasing power of the population remains relatively resilient, as reflected in the consumer confidence index (IKK) of Bank Indonesia (BI) for November 2024, which stood at 125.9. In line with this optimistic IKK, the latest data from NielsenIQ shows that Indonesians are increasingly inclined to shop, with total spending in Q3 reaching Rp 256 trillion (US$15.77 billion)
“The government continues to work hard to maintain purchasing power and business competitiveness through various economic stimulus packages aimed at low-income households, the middle class and the business sector,” said Coordinating Economic Minister Airlangga Hartarto at the National Conference of the Indonesian Cooperative Council (DEKOPIN) at the Mercure Hotel Ancol, Jakarta, on Thursday.
The government is also continuously pushing for the empowerment of micro, small and medium enterprises (MSMEs) and cooperatives as drivers of the people’s economy. There is a need to strengthen human resources through technology adoption and governance improvements to enhance the competitiveness of cooperatives in the national economic ecosystem.
“Of course, we strongly hope that cooperatives will continue to move forward to drive economic growth and also promote productive sectors in line with the mandate of the Cooperative Law,” Airlangga stated.
Currently, the majority of cooperative businesses are in the financial services sector (66 percent) and trade (17 percent), while real sectors such as agriculture, plantations, livestock and fisheries are still limited. Therefore, optimizing the production sector is essential to increase the business volume of cooperatives.
“The production sector is expected to employ many people and, of course, the production sector can add to the domestic supply of goods. We hope that the proportion of industries or producers in DEKOPIN, the cooperative federation, will continue to grow. The number of entrepreneurs, as directed by the President, must be encouraged to grow, and one of the sources for this is certainly from DEKOPIN,” Airlangga said.
The government encourages easier financing for cooperatives and MSMEs through the people’s business credit (KUR) program with low-interest rates. As of Nov. 30, 2024, the realization of KUR reached Rp 269.48 trillion, or 96.24 percent of the 2024 target, with the non-performing loan (NPL) rate maintained at 2.19 percent.
Furthermore, the government, through the Revolving Fund Management Agency (LPDB) at the Cooperatives Ministry, provides funding access for cooperatives, with disbursement to the real sector increasing from Rp 38.7 billion in 2020 to Rp 506.2 billion in 2023, growing by 960.53 percent.
Airlangga also expressed his hope that cooperatives would adapt to the digital industry. The digitalization of cooperatives will add efficiency and strengthen membership, as they will be connected not only in terms of the supply chain, but also integrated through networks and digital data, providing users with broader access.
“I certainly hope, once again, that DEKOPIN will be a game changer in increasing entrepreneurship in Indonesia. DEKOPIN will continue to grow, remain strong and regenerate, so that cooperative activities can continue to be the root of the national economy,” concluded Airlangga. (dlt/fsr)
This article was published in collaboration with Coordinating Ministry for Economic Affairs Republic of Indonesia
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