Indonesia's economy has shown remarkable resilience in 2024, growing despite high global financial market uncertainty. According to data from the Indonesian Central Statistics Agency (BPS), the country's economy expanded by 5.02% year-on-year (YoY) in the fourth quarter of 2024. This was an improvement over the previous quarter's 4.95% growth. As a result, the overall economic growth for 2024 reached 5.03% YoY, reflecting the strength of the domestic economy despite external challenges.

Looking ahead, Indonesia's economy is expected to continue growing at a strong pace in 2025, with projections ranging from 4.7% to 5.5% YoY. Bank Indonesia is playing a key role in maintaining this growth by optimizing its monetary policy mix, particularly focusing on macroprudential policy stimulus and the acceleration of digital payment transactions. These efforts are supported by the Indonesian government’s fiscal policies aimed at boosting economic stability and sustainable growth.

The increase in domestic economic activity has been pivotal in driving Indonesia's growth. Household consumption saw a notable increase, growing by 4.98% YoY, as people’s mobility was high during major national holidays, particularly Christmas and New Year's. Investment growth also remained strong, with a 5.03% YoY increase, fueled by higher capital expenditure. Additionally, government consumption grew by 4.17% YoY, primarily due to year-end spending.

The export sector played a crucial role in driving economic growth, posting a 7.63% YoY increase. This growth was driven by strong demand from key trading partners, rising prices for several major export commodities, and a surge in the export of services, particularly due to an increase in foreign tourist arrivals.

Looking at the economic performance from the perspective of industry sectors, all sectors saw positive growth in the fourth quarter of 2024. Manufacturing and trade sectors, key contributors to economic growth, remained strong, driven by robust domestic demand. Sectors such as accommodation, food and beverage, and transportation also grew significantly due to higher mobility during the holiday season.

Geographically, most regions in Indonesia saw higher economic growth compared to the previous quarter, with the Sulawesi-Maluku-Papua region (Sulampua) recording the highest growth, followed by Kalimantan, Java, Sumatra, and Bali-Nusa Tenggara (Balinusra).

As Indonesia continues to navigate global economic uncertainties, the country’s diverse growth drivers provide a solid foundation for future expansion. With continued support from the government and central bank, Indonesia's economic outlook remains promising for 2025.

PHOTO: SHUTTERSTOCK

This article was created with AI assistance.