LPEM UI Forecasts Indonesia's GDP Growth Between 5.12 Percent - 5.17 Percent for Q1 2024
Jakarta. The Economic Research and Community Institute (LPEM) of the Faculty of Economics and Business (FEB) at the University of Indonesia (UI) has forecasted that economic growth for the first quarter of 2024 will range between 5.12 percent and 5.17 percent.
"In the first quarter of 2024, GDP is estimated to grow between 5.12 percent and 5.17 percent, and between 5 percent and 5.1 percent for the entire year, driven by domestic consumption and investment realization," said Teuku Riefky, a macroeconomics and financial market economist at LPEM FEB UI, in the Indonesia Economic Outlook Macro Analysis Series Quarter II 2024 report received on Sunday.
Despite a robust first-quarter investment, totaling Rp 401.5 trillion, a 22.1 percent year-on-year (yoy) increase, the trade balance experienced a decline. The trade surplus fell to $7.34 billion in the first quarter of 2024, a 39.4 percent decrease from the same period last year.
Meanwhile, the 2024 elections, accompanied by several long holiday periods, have the potential to boost overall consumption. Furthermore, the seasonal celebration of Ramadan could further drive economic growth.
"On the other hand, investment realization far exceeding the target reflects investors' confidence in Indonesia's current economic prospects," explained Riefky.
Finance Minister Sri Mulyani Indrawati predicted that economic growth in the first quarter of 2024 would reach 5.17 percent. The performance of economic growth in the first quarter of 2024 is still supported by household consumption.
However, it is hampered by the performance of exports and imports, which often face contractions due to the impact of global economic turmoil.
Sri Mulyani stated that with good performance from consumers, manufacturing, foreign direct investment (FDI), and the Purchasing Managers' Index (PMI), the prediction for the first quarter of 2024 will see growth at 5.17 percent.
"In January-March 2024, we estimate that it will still remain above 5 percent. However, we are cautious about the turbulence occurring in the global economy," said Sri Mulyani.
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