In the last decade, the Indonesian economy has continued to perform well, demonstrated by the success of maintaining economic growth at a good level, especially after the pandemic ended. In fact, based on World Bank projections, Indonesia is expected to grow in the range of 5%-5.2% in the 2024-2025 period or return to the same or higher growth rate as before the pandemic.

Inflation developments are also under control within the target range, where until September 2024 it will be at the level of 1.84% (yoy), which can be said to be maintained at around 2.5% ± 1%. The low and stable inflation rate is in line with increasing growth in shopping volumes. This shows that people's purchasing power remains strong, thus supporting the momentum of economic growth. The deflation phenomenon that occurred for five consecutive months was also more influenced by the decline in prices of a number of food commodities.

"Core inflation is in line with the trend, but volatile foods have been reduced to low levels. The government meets every week, because we have a different way than other countries, to regulate inflation levels throughout Indonesia. "We also provide fiscal incentives for them to maintain food prices," explained Coordinating Minister for Economic Affairs Airlangga Hartarto when giving a keynote speech at HSBC's 140th Anniversary Celebration in Indonesia, in Jakarta, Tuesday (15/10).

The condition of the Indonesian financial market is relatively stable. The performance of the Rupiah exchange rate is relatively better than a number of other Asian countries, namely -1.05% (ytd). The Indonesian stock price index also grew positively, namely 3.94% (ytd) and reached its highest position or all-time high at the level of 7,905.39 on September 19 2024.

"No one thought that Indonesia could maintain the value of the Rupiah below IDR 16 thousand per 1 USD compared to (perception) three months ago, and this is an achievement for the Indonesian economic team," explained Coordinating Minister Airlangga.

With these various good achievements, investors still see Indonesia as an attractive country. Latest, Rating and Investment Information, Inc. (R&I) affirmed the Republic of Indonesia's Sovereign Credit Rating (SCR) at BBB+, two levels above investment grade with a positive outlook. Indonesia's competitiveness ranking continues to increase to its highest position in 10 years (27th in 2024 based on the IMD World Competitiveness Ranking).

Indonesia focuses on providing easy investment in 22 Special Economic Zones (KEK) spread throughout Indonesia. Apart from that, there is promising potential for investment in the Carbon Capture Storage (CCS), semiconductor, green hydrogen and Small-Modular Reactors (SMRs) sectors in Indonesia.

To accelerate growth in the medium to long term, the government has prepared a new engine of growth strategy such as digitalization, energy transition and semiconductors. Apart from that, social resilience and community empowerment are also priorities.

The banking industry, especially banks with international networks such as HSBC, plays an important role in supporting efforts to encourage the flow of foreign investment into the country. The good program that HSBC has carried out, namely creating investor connectivity with domestic business actors, must continue to be maintained.

“The conditions (conflicts in) the Middle East and Russia-Ukraine make everything (international trade) not easy because they are interrelated. And also this is a different situation today, especially because there is technological disruption, it is more complex so you need the help of 'friends' to navigate into the future. (That friend) is like HSBC, so I want HSBC to be in Indonesia in the next 140 years too," concluded Coordinating Minister Airlangga.

Also present at this event were Group Chairman of HSBC Holdings plc Mark Tucker, Co-chief Executive of Asia Pacific HSBC Surendra Rosha, President Director of PT Bank HSBC Indonesia Francois de Maricourt, and Ambassadors of friendly countries.

(SOURCE)