AYOBANDUNG.COM - Bank Indonesia is optimistic that the West Java economy will grow, despite several challenges related to global geopolitics which are expected to affect the national and West Java economies.

According to the Head of Bank Indonesia (BI) West Java, Muhamad Nur, there are several factors supporting West Java's economic growth. Among them are improvements in domestic demand, where the increase in the West Java Provincial Minimum Wage (UMP) and the 13th salary payment incentive are expected to boost domestic demand.

"Elections and regional elections in 2024, intense political activities can provide a boost to the local economy. Then the growing trend of digitalization in West Java opens up new opportunities for various industrial sectors," he explained.

In addition, the investment climate is maintained. Where the increased optimism of business people after the one-round election provides a positive signal for the investment climate. Horticultural deflation in the second quarter of 2024 indicates an improvement in horticultural productivity in West Java.

"Infrastructure development such as the Bocimi and Getaci toll roads is improving connectivity between the North and South West Java regions," he explained.

Nevertheless, West Java is also faced with several serious challenges, including the uncertainty of the Fed Funds Rate (FFR) decline. In line with the increasing unemployment rate in the United States.

Then central bank policy divergence. Various policies taken by the Central Banks of world countries on the dynamics of the global economy add to the uncertainty.

"The conflict in the Middle East that escalated after the death of the Hamas leader added pressure to global stability," said M Nur.

In terms of the industrial sector, the performance of exports and the processing industry is restrained due to conditions of global economic uncertainty. Then it is necessary to watch out for potential crop failures. Seasonal shifts have the potential to cause the failure of the gadu rice harvest. Scarring Effect of El Nino: The ongoing El Nino condition has resulted in a non-optimal rice harvest.

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