Indonesian Outlook

2024-2029
March 13th, 2024
 Economic Global Review Update :
Challenges in 2024
IMF Projection of GDP Growth for
Global GDP Growth % YoY IMF Inflation Projection % YoY
ASEAN & G-20 Countries in 2024
India 6,5
IMF (Jan'24) WB(Jan’24) Realization Philippines 6,0
6,3 Vietnam 5,8
Indonesia 5,0
China 4,6
3,5 3,1 3,1 Thailand 4,4
2,8 2,6 2,4 Malaysia 4,3
Turkiye 3,1
Mexico 2,7
Saudi Arabia 2,7
Russia 2,6
South Korea 2,3
-2,8 United States 2,1
Singapore 2,1
2019 2020 2021 2022 2023f 2024f 2019 2020 2021 2022 2023f 2024f 2025f Brazil 1,7
Spain 1,5
Australia 1,4
Downside Risk Upside Risk Canada 1,4
France 1,0
South Africa 1,0
❏ Geopolitical Tensions Escalation (Ukraine ❏ Potential for new growth sources
Japan 0,9
vs Russia and Israel vs Palestine) ❏ Easing inflationary pressures Euro Area 0,9
❏ Limited Policy Space ❏ Monetary policy relaxation Italy 0,7
❏ Geo-economic Fragmentation United Kingdom 0,6
Germany 0,5
❏ Climate Change-Induced Shocks
Argentina -2,8
❏ Economic Slowdown in China
Source: IMF (Jan, 2024), World Bank (Jan, 2024)
 In the midst of projections of a global economic slowdown, several major trading partner
countries of Indonesia are experiencing positive growth.

China AS Japan India

7,1 7,2
6,3
5,2 5,2
4,5
3,0 3,1
2,9 2,5
1,9 2,0
1,1 1,0
0,7 0,5

Q4 - 2022 Q4 - 2023 2022 2023 Q4 - 2022 Q4 - 2023 2022 2023 Q4 - 2022 Q4 - 2023 2022 2023 Q4 - 2022 Q4 - 2023 2022 2023

The Indonesian economy is growing positively, although at a slower pace compared to last year.

Source: Official Statistical News, BPS (Feb, 2024)

 GDP Growth by Sector 13,96
(YoY, %) GDP Growth and Distribution (%)
6,12 The economic growth of Indonesia in 2023 is 5,05%. The Sulawesi, Maluku, and Papua regions
5,33 are growing above the national economic growth rate. Java Island grows by 4,96% and
4,85
4,64 contributes 57,05% to Indonesia's economy.

1,40

Contribution
etc
Growth
Sulawesi
Agriculture Mining Manufacturing Trade and Transportation Others Kalimantan
Industry repair and 7,10
warehousing 8,49
GDP Growth Based on Expenditure 6,37
5,43
(YoY, %)
Maluku & Papua
9,83 Sumatera
4,82 4,40 2,58
22,01
2,95
1,32 6,94
4,69
-1,65
Bali & Nusra
2,77
Jawa
57,05 4,00

Household Non-Household Government Capital Goods Export import 4,96

consumption Consumption Expenditure Consumption

Source: Official Statistical News, BPS (Feb, 2024)

 All business sectors will grow positively in 2023 (YoY, %)
Distribution (%) Growth (YoY, %)
18,67% Manufacturing Industry 4,64%

12,94% Trade 4,85%

12,53% Agriculture 1,30%

10,52% Mining 6,12%

9,92% Construction 4,91%

5,89% Transportation and Warehousing 13.96%

❖ The business sectors with the largest contributions to
4,23% Information and Communication 7,59%
the economy, namely Manufacturing Industry,
4,16% Financial Services 4,77%
Trade, Agriculture, Mining, and Construction,
2,95% Government Administration 1,50%
continue their positive growth trend.
❖ The sectors experiencing the highest growth are 2,79% Educational Services 1,78%

Transportation & Warehousing, Other Services, as 2,52% Accommodation & Food Services 10,01%
well as Accommodation & Food Services, driven by 2,42% 1,43%
Real Estate
increased community mobility, hosting international 1,94%
Other Services 10,52%
events such as the U-17 World Cup, ASEAN Summit
1,83% 8,24%
meetings, MotoGP Mandalika, and preparations Corporate Services
1,21% Health Services 4,66%
for the general elections.
1,04% Electricity & Gas Supply 4,91%

Source: Official Statistical News, BPS (Feb, 2024) 0,06% Water Supply 4,90%
 The Economic Growth Projection for Indonesia from 2024 to 2028
IMF Projection for Economic Growth in Indonesia
● In the midst of global economic downturn, Indonesia is
Realization IMF
projected to grow relatively well at around 5.0% in 2024
5,3
5,05 4,95 4,96 4,95 4,95 4,95
compared to G20 and ASEAN countries.
● Global weakening and the downward trend in
commodity prices should be monitored as they may
potentially impact Indonesia's economic performance.
● Household consumption in 2023 is still growing at 4.82%,
2022 2023 2024 2025 2026 2027 2028
contributing 53% to the total Gross Domestic Product
(GDP).
Basic Macroeconomic Assumptions for 2023 and 2024

Economic Growth (%) USD/IDR Exchange Rate Global Oil Price (USD/barrel)
2023 : 5,1 2023 : 15.100 2023 : 78
2024 : 5,2 2024 : 15.000 2024 : 80
Inflation (%) Yield SBN 10 Year (%) Oil & Gas Lifting
2023 : 3,1 2023 : 6,8 2023 : 614 & 985
2024 : 2,8 2024 : 6,7 2024 : 985 & 1.033
Source: IMF (Oct, 2023), Ministry of Finance (Sept, 2023)
 Economic transformation
Transformasi Ekonomi
will lead Indonesia out of the middle-income trap

Transformation Stages

Stage 1: 2025-2029 Stage 2: 2030-2034 Stage 3: 2035-2039 Stage 4: 2040-2045

Strengthening the Foundation Acceleration of Transformation Global Expansion Acceleration of Transformation

❖ Downstreaming of Natural Resources and ❖ Massive Productivity Improvement and ❖ An integrated Economic Powerhouse ❖ High-Income Country
Strengthening Research, Innovation, and Labor Expansion of Economic Growth Sources connected to global and domestic supply ❖ Growth Range: 5,4-6,7%
Productivity ❖ Growth Range: 6,9-7,8% chains, with robust exports. ❖ Contribution of the Manufacturing
❖ Growth Range:: 5,6-6,1% ❖ Contribution of the Manufacturing Industry to ❖ Growth Range:: 6,4-7,6% Industry to GDP: 28,0%
❖ Contribution of the Manufacturing Industry to GDP: GDP: 26,6% ❖ Contribution of the Manufacturing ❖ Middle Class Income: 80% of the
21,9% ❖ Middle Class Income: 50% of the population Industry to GDP: 30,0% population
❖ Middle Class Income: 38% of the population ❖ Middle Class Income: 61% of the
population
❖ i

Manufacturing, value added

(% of GDP) - Indonesia

Source: RPJPN Document (BAPPENAS, 2023); World Bank (2002-2022)

Priority Industries Based on Economic Corridors 2025-2045
Natural Resources-Based
Medium to High-Tech Industries
Industries
Agro (agriculture, plantations, and forestry) Shipbuilding
Mining Downstreaming Electronics

Marine Resources Aerospace 2025-2029

Digital Strengthening Industrial Ecosystem and
Increasing Industrial Product Complexity
Basic Industries Automotive and Transport Equipment ● Contribution of the
Manufacturing Industry to
Defense GDP: 21,9%
Basic Chemistry Metals
Health Equipment ● Average Investment: 6,4-6,7%
Sustainable Consumer Goods
Industries Chemical and Pharmaceutical Products
Industrialization is the
key to becoming an inclusive
Food and Beverage Footwear Machinery and Equipment
Creative Industries developed nation:

Textiles and Textile Products • Downstreaming

Film, Animation, and Visual Art Culinary towards high-value end
Innovation and Research- products based on:
Based Industries Arts, Culture, and Crafts
✔ Renewable resources and
Application and Game Development Non-renewable resources
Blue Economy Bioeconomy
Source: RPJPN Document (BAPPENAS, 2024)
 Energy transition is directed towards the utilization of clean, efficient, and renewable energy.
From 2025 to 2029, Indonesia will undertake:

● Utilization of Carbon Capture, ● Preparation of Regulations and ● Rise in the Adoption of Electric
Utilization, and Storage Institutions for Low-Carbon Vehicles and Household
(CCS/CCUS) and Restriction on Nuclear Power Plants, Hydrogen, Electrical Appliances, along with
Coal-Fired Power Plant and Ammonia Supporting Infrastructure
Development
● Widespread Implementation of ● Development of Electrical Grid
● Utilization of Energy Storage Carbon Credits Systems through
Systems (ESS) Interconnection and Smart Grid
● Gradual Shift of Fossil Fuel
● Development of Renewable Subsidies to Renewable Energy
Energy Power Plants Subsidies
(Hydropower, Solar Power,
Geothermal Power, Wind Power, ● Increased Utilization of Natural
and Biomass Power Plants) Gas in the Industrial Sector
Source: RPJPN Document (BAPPENAS, 2024)