Bank Indonesia (BI) Governor Perry Warjiyo expressed optimism over the positive trend in Indonesia’s economic growth, stating that the nation’s economy remains robust and should be further accelerated. Following a central bank meeting, Warjiyo highlighted several key indicators supporting this optimism, including high consumer confidence, positive retail sales, and increased imports of capital goods and cement.
Investment, particularly in the construction sector, continues to thrive, supported by ongoing projects like the new capital Nusantara and other national strategic initiatives. Household consumption, especially among the upper-middle class, has remained stable, while non-oil and gas exports have also bolstered growth. Warjiyo emphasized the importance of government spending, which is expected to rise by year-end, further boosting domestic demand.
BI predicts Indonesia’s 2024 economic growth to fall between 4.7% and 5.5%, with a midpoint of 5.1%. The central bank is committed to strengthening its policy mix to promote growth, working closely with the government’s fiscal policies. Additionally, structural reforms aimed at enhancing productivity and supporting labor-absorbing sectors will be crucial to sustaining long-term growth.
Inflation remains under control, with the Consumer Price Index (CPI) recorded at 2.12% year-on-year (yoy) as of August 2024, and core inflation at 2.02% yoy. Warjiyo credits stable inflation to the economy’s capacity to respond to domestic demand, controlled imported inflation, and the positive impact of digitalization. Volatile food inflation has also declined to 3.04% yoy, aided by increased food supply from harvests and coordinated inflation control efforts across regions.
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