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INDONESIAN Finance Minister, Sri Mulyani Indrawati said that Indonesia was able to maintain strong economic growth in the first quarter of 2024, reaching 5.1% year-on-year (yoy).
“In the midst of global uncertainty, the Indonesian economy continues to show its resilience as evidenced by the growth performance in the first quarter,” Sri Mulyani said in her statement in Jakarta on Monday (05/6), 2024.
On the expenditure side, household consumption and non-profit institutions serving households (LNPRT) grew by 4.9% and 24.3% (yoy), respectively. The continued strong growth in household consumption was mainly driven by controlled inflation, increased economic activity during Ramadan, increased salaries for government employees (ASN), and the provision of holiday allowances (THR).
“Indirectly, government spending related to the conduct of elections also supports household consumption through the provision of honoraria to election officials. Meanwhile, consumption by the LNPRT has surged mainly due to various activities related to the 2024 elections,” she explained.
Meanwhile, government consumption expenditure (PKP) grew at a double-digit rate of 19.9% (yoy). This growth was influenced by increases in ASN salaries, THR payments, spending on goods and social spending. PKP contributed 1.1% to economic growth in the first quarter of 2024, the third largest contributor after public consumption and gross fixed capital formation (GFCF).
Growth in PMTB or investment was recorded at 3.8% (yoy), supported by government investment activities related to infrastructure. The increasing sustainability of natural resource extraction, excellent macroeconomic performance and socio-political stability maintain Indonesia’s attractiveness as an investment destination.
Private sector investment performance is also reflected in the realization of foreign and domestic investment in the first quarter, which grew at a high rate of 22.1% (yoy) with a balanced distribution of investment between Java and outside Java.
The global economic slowdown trend affects Indonesia’s export and import growth. In the first quarter of 2024, real exports will still grow by 0.5% (yoy), supported by an increase in services exports in line with the strong flow of foreign tourist visits to Indonesia.
On the other hand, the export volume of major products such as steel and mineral fuels remained strong, growing by 35.8% and 5.4% (yoy), respectively, in the first quarter of 2024. Meanwhile, real imports also grow by 1.8% (yoy) in the first quarter of 2024. Overall, the contribution of net exports (exports-imports) to growth shrank by 0.2%.
According to the Minister of Finance, there are still several global risks to be faced in the future, such as the direction of the Fed’s policy, the escalation of geopolitical tensions, and the disruption of the global supply chain, which has not yet fully recovered.
In anticipation of various global dynamics, Sri Mulyani assured that the monetary authority and the financial sector would continue to strengthen synergy and coordination to maintain national economic stability.
“The government will continue to monitor and assess the potential impact of global dynamics on the domestic economy and financial conditions. The APBN will continue to be optimized as a shock absorber to maintain people’s purchasing power and the momentum of economic growth,” Sri Mulyani concluded. [antaranews/photo special]
