Jakarta, 6/8/2024 Ministry of Finance – Minister of Finance (Menkeu) Sri Mulyani Indrawati emphasized that the government will pay attention to factors driving economic growth so that the growth target of 5.2 percent can be achieved in semester II-2024.

“We will pay attention to consumption, investment, exports and imports. "We will continue to look at factors in this second semester, namely the third and fourth quarters, to ensure that economic growth can be maintained at a level of between 5.1 (percent) to even 5.2 (percent)," said the Minister of Finance in press statement at the President's Office, Jakarta on Monday (5/8).

Based on data from the Central Statistics Agency (BPS), Indonesia's economic growth in the second quarter of 2024 grew by 5.05 percent (year on year/yoy) supported by strong domestic demand and increasing export performance. In terms of expenditure, household consumption as the main contributor grew by 4.93 percent (yoy) driven by longer religious holiday periods and school holidays.

Apart from that, people's purchasing power is still maintained in line with controlled inflation, an increase in ASN salaries, the provision of a 13th salary with 100 percent performance allowance, as well as the creation of greater new jobs in early 2024 amounting to 3.55 million. Meanwhile, government consumption grew positively by 1.42 percent, mainly supported by quite high absorption of capital expenditure and goods expenditure, respectively at 39.5 percent and 6.1 percent.

Meanwhile, investment growth or Gross Fixed Capital Formation (PMTB) was recorded to have strengthened by 4.43 percent (yoy), supported by the performance of building investment growth which grew 5.31 percent. One of the factors driving increased investment is the high absorption of government capital expenditure related to the completion of various National Strategic Projects (PSN), including the development of the Archipelago Capital City (IKN).

On the other hand, the Government Borne Value Added Tax (VAT DTP) housing policy also encourages private sector property construction activity which continues to show an upward trend. Private investment activity which is still strong can also be seen from the performance of the realization of Foreign Direct Investment (PMA) and Domestic Investment (PMDN) which grew 22.49 percent, as well as the Manufacturing Purchasing Managers' Index (PMI) which was in the expansion zone throughout the second quarter.

From the production side, all sectors grew positively in the second quarter of 2024. The manufacturing sector grew by 3.95 percent (yoy). Downstream-related industries, such as the basic metal processing industry and the non-metallic minerals industry, are also growing rapidly. The food and beverage industry, which is the largest contributor to the manufacturing sector, grew 5.53 percent.

Another main sector, namely the trade sector, grew by 4.86 percent (yoy) in line with public consumption which was still strong. Other sectors such as agriculture, forestry, fisheries, tourism, transportation and warehousing, as well as the provision of accommodation and food and drink also grew positively in the second quarter of 2024. On the other hand, the mining sector experienced a slowdown, especially related to the decline in oil and gas and coal production.

Resilient and consistent economic growth performance above 5 percent has a significant impact on community welfare. The unemployment rate will decrease from 5.45 percent in 2023 to 4.82 percent this year. Meanwhile, the poverty rate also continues to decline from 9.36 percent to 9.03 percent. Job creation in 2024 will also reach 3.55 million people, an increase from the previous 3.02 million people, which will continue to strengthen people's purchasing power in the future.

The government will continue to monitor the risk of global economic stagnation which is expected to continue throughout 2024. The 2024 APBN will continue to be optimized to maintain stability and momentum of economic growth so that the growth target of 5.2 percent can be achieved.

(SOURCE)