Jakarta. The Asian Development Bank (ADB) kept its 2024 growth forecasts for the Indonesian economy unchanged at 5 percent in its latest report.

Indonesia’s gross domestic product (GDP) is also forecast to grow at the same pace of 5 percent next year, according to ADB’s July edition of the Asian Development Outlook. Domestic demand becomes the driving force for Indonesia’s growth. 

“Private consumption picked up, boosted by election-related and government social spending, reduced inflation for nonfood products, and an increase in civil servant salaries,” the report’s explanation on Indonesia’s economy reads.

ADB also wrote that Indonesia had been witnessing a surge in public consumption.

“[It] outpaces the negative contribution to growth from net exports, the result of weak global demand and volatile commodity prices. Also, the cautious business approach during the election period slowed investment growth,” the report reads.

For context, Indonesia held the world’s largest single-day elections in February which saw hundreds of millions of Indonesians voting for the next president. The country will hold another election this November during which Indonesians will pick their regional heads.

ADB did not change Indonesia’s 2.8-percent inflation projections for this year and the next. 

The GDP forecasts are still within Bank Indonesia’s range. The central bank said that the Indonesian economy could see a growth rate between 4.7 and 5.5 percent in 2024.

ADB also did not revise its GDP growth forecasts for other Southeast Asian economies. 

The projected Indonesian economic growth beats that of Malaysia, which is on track to expand by 4.5 percent in 2024, and 4.6 percent the following year. Vietnam and the Philippines are both forecast to grow at a faster rate of 6 percent in 2024. ADB also maintained the Vietnamese GDP growth projection for 2025 at 6.2 percent. The same goes for the Philippines. The overall Southeast Asian region is forecast to grow 4.6 percent this year and at a faster pace of 4.7 percent in 2025.