TIMES JABAR, BANDUNG – Bank Indonesia (BI) is optimistic that West Java's economic growth will still meet the target in the range of 4.6% to 5.4% in 2024. Global geopolitical challenges and declining purchasing power are the main concerns by encouraging the investment, export and digitalization.

Deputy Head of the West Java Bank Indonesia Representative Office, Muslimin Anwar, said that West Java's economic growth in the second quarter of 2024 was recorded at 4.95% (year on year/yoy), higher than the previous quarter which grew at 4.93% (yoy). .

This growth was driven by increased domestic consumption, improved export activity and increased investment. Sectors that contribute greatly to economic growth include the agricultural sector, processing industry, transportation, warehousing and trade.

"West Java's economy is expected to continue to grow positively in the range of 4.6% to 5.4%, driven by strong domestic demand, increased community mobility, and infrastructure support that continues to develop," said Anwar at the Road to West Java Discussion event Journalist Competition (WJJC) 2024 is the result of collaboration between Bank Indonesia West Java and the Bandung Journalists Discussion Forum (FDWB) in Bandung, Saturday (5/10/2024).

However, Anwar explained, there are several challenges that must be anticipated, including global uncertainty which has an impact on export demand, as well as potential disruption in the agricultural sector due to the El Nino phenomenon.

However, he continued, BI is optimistic that the policies implemented, such as industrial downstreaming and accelerated digitalization, will have a positive impact on the economy of West Java.

One positive indicator of the West Java economy is controlled inflation. Until September 2024, West Java recorded inflation of 2.09% (yoy). West Java's annual inflation target of 2.5% is still on track.

"Bank Indonesia will continue to strengthen synergies with various parties to maintain economic stability and support sustainable growth in West Java, one of which is maximizing the role of the TPID (regional inflation control team)," he said.

From the investment sector, Anwar revealed that West Java investment realization in the second quarter of 2024 reached IDR 63.7 trillion. This achievement makes West Java the province with the highest investment realization in Indonesia. The processing industry, information communications and real estate sectors are the sectors most in demand by investors, with Japan, South Korea and Singapore as the main investor countries.

Anwar explained that digitalization and infrastructure are also the keys to encouraging West Java's economy to continue to grow and develop. "Digitalization has created great opportunities for economic growth. Currently, West Java has the most QRIS users nationally, which shows that digital transformation is underway," he said.

In August 2024, there will be more than 11 million QRIS users in West Java. Meanwhile, the number of registered merchants reached 7.3 million, the majority of which came from micro businesses. He added that digitalization of payments not only encourages transaction efficiency, but also empowers micro and small businesses.

In line with digitalization, BI West Java also emphasizes the importance of infrastructure development to support sustainable economic growth. Infrastructure such as toll roads and connectivity in the north and south of West Java, especially the Cisumdawu and Bocimi toll roads, make a significant contribution to increasing community mobility and distribution of goods.

"This infrastructure project will continue to be pushed so that it can have maximum impact on the regional economy," said Anwar.

The political year 2024, said Anwar, will also encourage an increase in domestic consumption driven by political activities. It is hoped that the momentum of the election will be able to support people's purchasing power, as well as strengthen the optimism of business actors after the election.

"New economic development in the tourism, agricultural and other sectors is one way to face future global challenges," he concluded.

Needs Synergy Between Parties

Meanwhile, academic from the Faculty of Economics and Business (FEB) at Padjadjaran University (Unpad) Ari Tjahajawandita said that synergy between parties is one of the keys so that the West Java economy can continue to grow to face various challenges in the future.

Ari proposed that the government can encourage and stabilize the economic sector which is already growing. Second, the government must improve the economic sector which is currently sluggish. "So what came down was to boost West Java's economic growth," said Ari.

Even though West Java's economic condition is quite good, Ari believes that the government must put itself in a pessimistic position as an anticipatory step if it does not meet the target. "If we are optimistic, the fear is that we want to improve but it turns out the achievements are low," he said.

Therefore, the government must be able to increase household consumption through government spending and investment. "If we want to encourage consumption, of course it must be supported by purchasing power. So the key is that purchasing power must be encouraged. There is also government spending, company investment and exports," he said.

(SOURCE)