The Institute for Development of Economics and Finance (INDEF) predicts that Indonesia’s economic growth will not reach 5% in 2024. There are a number of reasons why.
“So, if INDEF predicts, it is not pessimistic but realistic, for 2024 economic growth is predicted to be 5.2% but INDEF predicts only 4.8% considering global and domestic conditions. This is moderate. Not pessimistic,” said INDEF Executive Director Esther Sri Astuti in the agenda. detikcom Leaders Forum “Monitoring Opportunities in the Midst of Economic Uncertainty at Samisara Ballroom, Sopo Del Tower, South Jakarta, Thursday (14/3/2024). This event is supported by PT KB Bank Tbk, PT Bank Central Asia Tbk, and PT Bank Syariah Indonesia Tbk.
Esther then explained that one of the factors that prevents economic growth from reaching 5% is household consumption. He explained that it is common knowledge that Indonesia’s economic growth is driven by household consumption, the amount currently is around 53% of the total economic growth cake.
The problem, he explained, was that Indonesia faced various challenges in the household economic aspect. Food prices are rising, on the other hand, the minimal supply of basic commodities is not in line with high public demand.
“Supply less demand still causes prices to rise. Moreover, supply is short, demand increases plus there are seasonal factors such as elections, Ramadan and Eid,” he explained.
For this reason, he said that the erosion of consumer purchasing power has also caused the household consumption sector to slow down. Therefore, he emphasized that INDEF indicated that Indonesia would experience slowing economic growth in the near future.
“Insufficient supply and increasing demand reduce consumer purchasing power and slow down the consumption sector. And finally, because 53% of economic growth is driven by the household consumption sector, our prediction is a slowdown in economic growth,” he concluded.
On the other hand, General Chair of the Indonesian Entrepreneurs Association (APINDO) Shinta Widjaja Kamdani, said that 2024 is still full of uncertainty. Even though the economic growth target is in the range of 4.8-5.2%, no one knows for sure whether this target can be met or not.
“Why is the theme pessimistic, uncertainty? I think it is appropriate because this year is full of uncertainty. So, we may predict the target, we are in the range of 4.8% to 5.2%, but in reality nobody will know for sure,” he said at the detikcom Leaders event Forum ‘Monitoring Opportunities in the Midst of Economic Uncertainty’ This event is supported by PT KB Bank Tbk, PT Bank Central Asia Tbk, and PT Bank Syariah Indonesia Tbk, Thursday (14/3/2024).
Shinta thinks this is the first time a prediction has been made without any confidence. “This is the first time we have made a prediction. We are not sure about the prediction we made,” he said.
Meanwhile, BCA VP Economic Research, Agus Salim Hardjodinoto believes that the economic growth target of around 5% is relatively feasible. However, there need to be certain components to be able to achieve this target.
“Indeed, there will be data, there is an opportunity for this growth of around 5% to be relatively feasible. We hope that there will be interesting things amidst this uncertainty that can be close to the government’s target,” he concluded.
March 14, 2024, detikFinance
(https://finance.detik.com/berita-ekonomi-bisnis/d-7240785/ekonom-prediksi-ekonomi-ri-tak-sampai-5-di-2024-ini-alasannya)
(https://finance.detik.com/berita-ekonomi-bisnis/d-7240712/pengusaha-ekonom-pesimistis-soal-ekonomi-ri-bisa-5-tahun-ini)