Bank Indonesia reveals that Indonesia’s economy maintained solid growth in the fourth quarter of 2023 despite global economic challenges.

Bank Indonesia governor, Bapak Perry Warjiyo, speaking at the ‘2024 Starting Year Forum Seminar: Monetary Stability amidst the 2024 Economic Dynamics’ in Jakarta

Bank Indonesia (BI) announced on 1 February 2024 that Indonesia’s economy exhibited robust growth in the fourth quarter of 2023, even amidst a global economic slowdown, according to Bapak Erwin Haryono, the head of BI’s communication department.

Based on data from Statistics Indonesia (BPS), Indonesia’s economy expanded by 5.04 percent year-on-year (YOY) in the fourth quarter of 2023, showing an improvement from the previous quarter’s growth of 4.94 percent YOY. Consequently, the overall economic growth for 2023 reached 5.05 percent YOY.

In 2024, Indonesia’s economy is forecasted to grow within the range of 4.7–5.5 percent, supported primarily by domestic demand, including sustained consumption growth, the positive effects of the upcoming election, and increased investment in construction, particularly related to National Strategic Projects (PSN), such as the Nusantara capital city (IKN).

Pak Haryono highlighted that export performance is expected to be moderate due to the sluggish global economy and the downturn in commodity prices. Therefore, BI is intensifying its collaboration with the government to implement fiscal stimulus measures alongside macroprudential policies to stimulate economic growth, particularly through domestic demand.

In the fourth quarter of 2023, Indonesia’s economic expansion was bolstered by nearly all components of gross domestic product (GDP). Household consumption grew by 4.47 percent YOY, supported by heightened activity during the holiday season, stable purchasing power, and improved consumer confidence.

Additionally, investment surged by 5.02 percent YOY, driven by construction investment in line with ongoing infrastructure projects and increased capital investment. Despite challenges, exports grew by 1.64 percent YOY, buoyed by demand from key trade partners and sustained growth in service exports, particularly from rising international tourist arrivals.

Economically, the regions of Sulawesi, Maluku, and Papua reported the highest growth rates in the fourth quarter of 2023, followed by Kalimantan, Java, Bali-Nusa Tenggara, and Sumatra, reflecting a broad-based economic expansion across Indonesia’s diverse regions.

Source: Antara News