Jakarta. The rupiah strengthened against the US dollar on Wednesday morning, while the Jakarta Composite Index (JCI) edged lower ahead of the release of Indonesia’s economic growth data for 2024.

Bloomberg data showed the rupiah gained 41 points (0.25 percent) to trade at Rp 16,310 per US dollar as of 9:09 a.m. Jakarta time. This followed a 97-point (0.59 percent) appreciation on Monday, closing at Rp 16,351 per dollar. Meanwhile, the US dollar index fell to 108.060 from 109.880 earlier this week, with the euro and Japanese yen also posting gains against the greenback.

In commodity markets, gold prices hit a record high of $2,848 per ounce, buoyed by the dollar's weakness and declining bond yields.

The JCI opened 1.88 points (0.03 percent) lower at 7,071.5 during Wednesday's morning session. Initial trading recorded 920.1 million shares exchanged, with a transaction value of Rp 364.6 billion across 19,776 trades.
Economists expect Indonesia's economic growth for 2024 to reach 5 percent, slightly below the government's 5.2 percent target. According to Bank Permata's Chief Economist Josua Pardede, household consumption remains the primary driver of growth.

“Overall, growth for 2024 is projected at 5 percent year-on-year, compared to 5.05 percent in 2023,” Josua said on Tuesday. However, fourth-quarter growth is expected to slow to 4.91 percent, down from 4.95 percent in the previous quarter, attributed to weaker household consumption.

Indicators of this slowdown include a decline in broad money supply growth to 4.35 percent year-on-year in the fourth quarter of 2024 from 7.19 percent in the third quarter, as well as slower retail and automotive sales. Car sales grew just 3.77 percent year-on-year in the fourth quarter, compared to 14.82 percent in the previous quarter, while motorcycle sales contracted by 3.6 percent year-on-year after rising 11.96 percent in the previous quarter.

Bank Danamon economist Hosianna Evalita Situmorang forecasts a slightly higher 2024 growth rate of 5.03 percent, with fourth-quarter growth at 5.02 percent, driven by seasonal factors such as increased consumption during the Christmas and New Year period. “Global commodity price increases also supported export performance, aiding the economy,” she added.

Looking ahead to 2025, Bank Indonesia Governor Perry Warjiyo warned that growth could remain below expectations, citing weaker domestic demand and slowing exports due to reduced demand from key trading partners, except the United States. “Household consumption remains weak, particularly among lower-income groups, as expectations for income growth and job availability have not yet strengthened,” Perry said recently.

“At the same time, private investment momentum remains subdued due to significant production capacity that still exceeds demand, both domestically and for exports,” Perry added.