Indonesia's Central Bank Estimates the Economy to Grow 4.7%-5.5% Next Year

December 23, 2023, 10.24 PM | Reporter: Bidara Pink

ILUSTRASI. Gubernur Bank Indonesia Perry Warjiyo (kedua kiri) didampingi Deputi Gubernur Senior BI Destry Damayanti (kedua kanan), Deputi Gubernur BI Juda Agung (kanan) dan Doni Primanto Joewono (kiri) menyampaikan hasil Rapat Dewan Gubernur BI di Kantor BI, Jakarta, Kamis (21/12/2023). Rapat Dewan Gubernur (RDG) Bank Indonesia bulan Desember 2023 memutuskan untuk mempertahankan BI rate sebesar 6,00 persen, suku bunga Deposit Facility sebesar 5,25 persen dan suku bunga Lending Facility sebesar 6,75 persen. ANTARA FOTO/Hafidz Mubarak A/Spt.

MONETARY POLICY - JAKARTA. Bank Indonesia (BI) is confident that Indonesia's economic growth will increase in 2024.

BI Governor Perry Warjiyo revealed that the forecast for Indonesia's economic growth next year is in the range of 4.7% annually or year on year (YoY) to 5.5% YoY, higher than the 2024 growth outlook of 4.5% YoY to 5.3% YoY.

Perry said, one of the drivers of economic growth next year is the general election.

“There is a positive impact from the implementation of the general election next year,” Perry explained in a press conference, on Thursday (21/12). The People's Festival is expected to be one of the drivers of household consumption growth in 2024.

At the same opportunity, BI Deputy Governor Aida S. Budiman revealed that the impact of the election will boost economic growth from the consumption channel.

Consumption is not only from household spending but also from government consumption. However, how big the impact will depend on whether the election is held in one round or two rounds.

She also calculated. If the people's festival next year is held in two rounds, there will be an additional about 0.6% from consumption.

“The calculation depends on one or two rounds, if two rounds, there might be an additional about 0.6% to household consumption. Not towards gross domestic product (GDP),” said Aida.

Well, the positive impact of the 2024 Election has been felt since the end of 2023. Considering that campaign activities have been carried out since the fourth quarter of this year.

“The impact has been felt in 2023 because there has been preparation for the Election. However, a greater impact will be felt in 2024,” said Aida.

Furthermore, in addition to consumption that is accelerating, the central bank sees government spending will also increase next year driven by the sustainability of national strategic project (PSN) development.

Plus, investment performance is expected to increase, in line with investors' confidence in the fundamentals of the domestic economy.

Furthermore, the monetary authority emphasized that it will strengthen the synergy of macroprudential stimulus and cooperation with the government to boost economic growth in 2024, especially from the demand side.