Heaptalk, Jakarta — Indonesia’s economy exhibits its resilience amidst global uncertainty by recording a growth of 5.05% in Q2 2024.
“Compared to China, we are still higher; China is at 4.7%, while Singapore is at 2.9%, South Korea at 2.3%, and Mexico at 2.24%,” said Coordinating Minister for Economic Affairs Airlangga Hartarto in Jakarta (08/05). International institutions, including the World Bank and IMF, estimate that global economic growth at the end of 2024 will be 2.6-3.2% (YoY), while in 2025 it will be 2.7-3.3% (YoY).
Airlangga voiced, “Specifically for Indonesia, these two international institutions also see that Indonesia can achieve a growth rate of 5.1 to 5.2. This also proves that our economic growth projections are relatively resilient against geopolitical conflicts, supply chain disruptions, and fluctuations in exchange rates.”
This growth rate is also supported by low and controlled inflation at 2.13% in July 2024. Additionally, this economic growth rate is higher compared to several other countries, such as China (4.7%), Singapore (2.9%), South Korea (2.3%), and Mexico (2.24%).
Supported by household consumption
On the expenditure side, the growth in Indonesia’s economy was supported by household consumption, which was 4.93% (YoY), and gross fixed capital formation (PMTB), which was 4.43% (YoY), as the main contributor to GDP. Meanwhile, the highest growth was experienced by the consumption of non-profit household institutions (LNPRT), at 9.98% (YoY).
In more detail, the achievements in expenditure were driven by the implementation of several policies, including the Government-borne Value Added Tax Incentive (PPN DTP) for the housing sector and the motor vehicle sector, especially electric vehicles for middle-class community stimulus, optimization of the implementation of cheap market operations and/or Cheap Food Movement (GPM), distribution of medium rice through the SPHP program, and the construction of National Strategic Projects (PSN) throughout 2024, with 41 PSNs targeted for completion.
Moreover, on the business sector side, the main contribution to GDP was still supported by the manufacturing industry, which grew by 3.95% (YoY). Meanwhile, the highest growth was achieved by the food and beverage accommodation sector, which grew by 10.17% (YoY), driven by national and international events. Additionally, the transportation and trade sectors experienced high growth of 9.56% (YoY), driven by mobility, export-import shipments, and increased tourist visits.
Spatially, the economy of all regions in Indonesia also strengthened, with the largest contribution to national GDP coming from Java Island, reaching 57.04%. Significant economic growth was also achieved by several regions, such as Maluku and Papua at 8.45%, driven by the manufacturing, mining, and quarrying industries; Bali and Nusa Tenggara at 6.84%, driven by mining and quarrying, agriculture, fisheries, and forestry; and Sulawesi at 6.07%, driven by agriculture, fisheries, forestry, and the manufacturing industry.
