IMF Projects Indonesia’s Economic Growth Under Pabowo’s Presidency At 5 1 Percent

Saturday, 26 Oct 2024

By ridwan@insightinnews.com

The International Monetary Fund (IMF) forecasts that Indonesia's economic growth under President Prabowo Subianto will remain stagnant at 5.1 percent. This projection is detailed in the latest report from the organization titled 'IMF World Economic Outlook' for October 2024.

The institution predicts that the real gross domestic product (GDP) growth of Indonesia from 2025 to 2029, which marks the end of Prabowo's presidential term, will plateau at 5.1 percent. Additionally, the IMF anticipates that Indonesia's current account balance will continue to be negative in 2025, similar to this year, but with a larger deficit of -1.2 compared to the previous -1.

In the same report, the IMF also projects the unemployment rate in Indonesia for 2025. The organization estimates that the unemployment rate will be 5.1 percent, reflecting a decrease from the previous year's rate of 5.2 percent.

"The IMF staff's projections are based on the latest budget (of Indonesia), extrapolated using the projected nominal GDP (and its components as necessary), while applying considerations to reflect the authorities' medium-term expenditure and revenue policies," the report states, as cited on Thursday, October 24, 2024.

Minister of Finance Sri Mulyani declined to comment on the IMF’s projection on Indonesian economic growth. However, on the sideline of at Financial System Stability Committee meeting on Friday (18/10), Sri Mulyani was quoted as saying that she was optimistic that Indonesia’s economic growth to reach 5.1% this year.

The Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that the International Monetary Fund (IMF) has not yet taken into account the strategies prepared by the new government under the leadership of President Prabowo Subianto when formulating projections for Indonesia's short-term economic growth.

Airlangga further noted that Prabowo has devised several medium-term plans aimed at boosting the national gross domestic product (GDP) growth rate. These short-term plans include enhancing exports, strengthening foreign exchange reserves, expanding the downstream processing of natural resource commodities, and bolstering research and development efforts. Nevertheless, Airlangga confirmed that, in the short term, the government is still targeting an annual economic growth rate of around 5 percent.

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