Indonesia's Economic to Grow Above 6% in 2024
Governor of Bank Indonesia Perry Warjiyo, Coordinating Minister for Economic Affairs Darmin Nasution and Staff at the launching of the 2018 Economic Book today (27/03). Photo by Bank Indonesia.

JAKARTA (TheInsiderStories)Bank Indonesia (BI) predicts Indonesia’s economic growth will move above 6 percent by 2024, in line with structural reforms carried out by the government, said the bank on its 2018 Economic Report Book today (03/27).

In the report, BI revealed, the factor that it can be happened is the positive impact of accelerating infrastructure development, human resource development, and a series of deregulation.

Increased infrastructure, such as power plants, toll roads, ports and airports, can further reduce production and distribution costs and have a positive impact on increasing economic competitiveness and capacity. In addition, various efforts deregulation in line with the structural reforms that have been taken has contributed to the improvement of the investment climate in Indonesia.

Furthermore, Indonesia’s resilience in addressing external turmoil will be better in the medium term. This is in line with the ongoing decline in the current account deficit, lower inflation and the prospect of an improving trend in Indonesia’s balance of payments. Improvement of external resilience is in line with the positive influence of the structural reforms taken by the government.

While for this year, the outlook for the Indonesian economy is predicted to be in the range of 5.0-5.4 percent, in the midst of a global economy that is not yet conducive. The economic growth was supported by strong domestic demand, external resilience has also been strengthened on the back of the current account deficit which fell to around 2.5 percent of gross domestic product (GDP), as well as increased inflows of foreign capital.

Price stability is also under control where inflation is predicted in the target range of 3.5, or about 1 percent. Financial system stability was also maintained and supported by intermediation, which improved with loan predicted to grow by 10-12 percent in 2019.

In order to achieve the economic growth target, BI will carry out a number of strategies in collaboration with the government, the Financial Service Authority and other authorities.

In this regard, monetary policy, financial sector policy, and fiscal policy are still directed at efforts to safeguard macroeconomic and financial sector stability, while still utilizing the available space for economic growth stimulus.

The economic stimulus includes optimizing the role of financial market deepening policies, macro prudential policies, payment system policies, and Islamic economics and finance.

Financial system stability was also strengthened through close coordination and supervision between the Ministry of Finance, Bank Indonesia, FSA and the Deposit Insurance Agency in the Financial System Stability Committee, including in the prevention and handling of the financial crisis.

Policy synergy was also taken to consistently continue structural reforms through four main strategies.

First, the strategy to improve the competitiveness of the national economy. This effort is carried out through strengthening four basic elements, namely the availability of infrastructure, quality of human capital, technology adoption, and institutional support.

Second, a strategy to develop the capacity and capability of the industrial sector. Third, the strategy to optimize the use of the digital economy. Finally, a strategy to expand economic funding sources.

Written by Staff Editor, Email: daniel@theinsiderstories.com