Jakarta. The Indonesian Employers Association (Apindo) is advising businesses to approach expansion plans with caution this year, citing the World Bank's forecast of a deceleration in Indonesia's economic growth and the upcoming 2024 presidential election.

The World Bank forecasts a continued slowdown in global growth for the third consecutive year, dropping from 2.6 percent last year to 2.4 percent in 2024. Meanwhile, Indonesia's gross domestic product growth is anticipated to decelerate in line with the weakening outlook.

Indonesia's gross domestic product (GDP) growth is expected to drop from 5.3 percent in 2022 to 5 percent in 2023, and further decline to 4.9 percent in both 2024 and 2025.

Shinta Widjaja Kamdani, the Chairman of Apindo, agrees with the World Bank's projection calling it a "realistic forecast." Apindo itself projects Indonesia's economic growth in 2024 to be in the range of 4.8 percent to 5.2 percent.

"The (World Bank) projection will influence expectations for business performance, strategies related to marketing, and the degree of caution concerning expansion this year," Shinta said on Sunday.

According to Apindo's survey in 2023, around 58 percent of business entities remain optimistic about Indonesia's economic growth in 2024, with a majority still interested in expanding their businesses, contingent upon the relevant business or investment climate conditions.

According to Shinta, there are several critical factors for entrepreneurs to consider in looking at Indonesia's economic growth in this political year.

Firstly, ensuring socio-political stability and a smooth leadership transition is crucial. This implies that the forthcoming presidential change should avoid turmoil, societal polarization, attempts to delegitimize elections, and instances of election fraud.

"Furthermore, the selection of leaders who are genuinely committed to advancing and enhancing the accomplishments of the structural reforms in the national business or investment climate undertaken so far," Shinta remarked.

Shinta said Businesses hope for the upcoming leaders to prioritize Indonesia's global competitiveness. This involves fostering an open and transparent business and investment environment, ensuring business certainty, and promoting competitiveness on the global stage.

"In addition, a prompt leadership transition is imperative, signifying that elected leaders can promptly establish a capable cabinet, earning trust in the market, and effectively enhancing the competitiveness of Indonesia's business and investment climate," Shinta concluded.

"Additionally, a quick leadership transition is needed, meaning that the elected leaders can immediately create a competent cabinet trusted by the market and can work effectively in improving the competitiveness of the business or investment climate in Indonesia," Shinta said.