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View all search resultsShifting gear to growth with stability mode
The country needs a balanced approach to growth that incorporates innovation, development and investment in targeting key value-added sectors to not just catch up with its regional peers, but to achieve its overarching goal in the Golden Indonesia 2045 vision.
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Workers produce noodles on Jan. 14, 2023, at a factory in Surabaya, East Java. (AFP/Juni Kriswanto)
W
e are at an important moment in Indonesia's economic development. After decades of prioritizing stability over growth, focusing on maintaining a steady economic pace while ensuring fiscal discipline and managing inflation, Indonesia now faces an increasingly competitive global landscape.
Stability has been the guiding principle for years, shielding Indonesia from major economic shocks and ensuring consistent growth. Yet as neighboring countries advance more rapidly, it has become clear that our focus must evolve.
The goal now is to pursue growth with stability: a strategy that aims to accelerate economic expansion while maintaining the robust fundamentals that have long underpinned Indonesia’s resilience. This shift is not just about increasing the growth rate, but about ensuring it is sustainable, inclusive and strategically positioned to strengthen Indonesia’s competitiveness in the global economy.
Indonesia's gross domestic product (GDP) per capita currently stands at US$4,900. While this figure is not insignificant, it has remained stagnant for years. In comparison, Vietnam has a GDP per capita of $4,600, up from $3,400 five years ago, but has experienced faster economic expansion.
The pace of growth in Indonesia is insufficient to catch up with its regional peers in critical areas such as industrial competitiveness, innovation and overall economic development. If this trend continues, it risks being left behind.
To secure our prospect and provide better living standards, Indonesia needs to target higher growth that not only lifts GDP per capita but also drives investment, fosters job creation and expands the middle class. This shift will be key to building a more sustainable economy and strengthening resilience against global challenges.
The national economy has grown at a pace of around 5 percent in recent years. This has been a stable growth trajectory largely driven by household consumption, which accounts for more than 50 percent of GDP.
