Jakarta. Chief Economic Airlangga Hartarto recently said that Indonesia’s economy remained solid and even surpassed peer countries amidst global uncertainties.

Indonesia’s economy expanded by 5.02 percent year-on-year in the fourth quarter of 2024, surpassing that of Singapore (4.3 percent), Saudi Arabia (4.4 percent), and Malaysia (4.8 percent). Indonesia’s economic growth throughout 2024 stood at 5.03 percent.

The government also managed to keep inflation in check. In December 2024, inflation stood at 1.57 percent, still within the target range of between 1.5 and 3.5 percent. Debt-to-gross domestic product (GDP) ratio hit 38.9 percent as of September 2024. The inflation rate in January 2025 was 0.76 percent yoy, which Indonesia attributed to the 50-percent electricity discount and airfare discounts during the recent year-end holiday season.

“The fourth quarter was the first quarter of President Prabwoo Subianto's administration. And our economy managed to grow by 5.02 percent yoy or 0.53 percent quarter-to-quarter. This shows that we are still within the 5 percent range. And the annual growth also reached 5.03 percent in 2024,” Airlangga recently told reporters in Jakarta.

Indonesia’s GDP also continues to grow, reaching Rp 22,139 trillion (approximately $1.3 trillion). This marks an increase compared to Rp 20,892 trillion the previous year. Indonesia’s GDP per capita also stands at Rp 78.62 million or around $4,960.33.

"The economy in the fourth quarter has always grown at a slower pace compared to the third quarter. However, economic activity remains strong due to the holiday season and the regional elections. The government has also had a series of year-end holiday policies, including free homecoming trips, a 10-percent airfare discount, the National Online Shopping Day, the Belanja di Indonesia Aja (BINA) program and discounts in 2024, and the EPIC sale program, all of which provide purchasing power or public spending of Rp 71 trillion in December," Airlangga said.

The manufacturing purchasing managers’ index (PMI) has also returned to the expansion level of 51.9 as of January 2025. The consumer confidence index also stood at 121.1.

In terms of expenditure, all components recorded positive growth. Household consumption remained a key driver, growing at 4.94 percent yoy in 2024. This component also contributed 54 percent to the Indonesian economy. Government consumption growth also grew high along with the increase in the state spending on employees, goods, and services. All industries also witnessed positive growth, particularly manufacturing, trade, agriculture, construction, and mining which contributed 63.9 percent to the GDP in 2024. Regions such as Bali-Nusa Tenggara, Kalimantan, Sulawesi, Maluku, and Papua are also growing above the national average. 

The government has also readied a series of economic policies to boost growth in 2025. This includes giving airfare discounts, 2025 Harbolnas online shopping day promos, other shopping spree programs like BINA and Epic Sale, as well as toll tariff discounts. The government will also try to keep food prices stable.

Indonesia has also developed some strategies to drive long-term economic transformation, according to Airlangga. This includes running a free nutritious meal program that feeds schoolchildren across the archipelago. Efforts are also underway to improve Indonesia’s food and energy security, as well as ease of doing business through the revision of the 2021 presidential regulation on the risk-based business licensing.

“We will also try to control inflation and develop the special economic zones [SEZs].  … We will continue our tax holiday and tax allowance to maintain our investment climate,” Airlangga said.

The minister also touched on Indonesia’s efforts to access new markets through finalizing several trade pacts. Indonesia is aiming to complete its Comprehensive Economic Partnership Agreement (CEPA) negotiations with the European Union in the first semester of 2025. It is also working on implementing Indonesia-Canada CEPA. The Southeast Asian country has recently joined BRICS and is in the process of getting a seat at the Organization for Economic Cooperation and Development (OECD).