Indonesia’s Post-Pandemic Economic Recovery and Growth

One of the indicators targeted by President Jokowi’s administration is economic growth. Economic growth in the last ten years has remained solid, although it contracted when the Covid-19 pandemic hit Indonesia, which caused the Indonesian economy to contract by 2.07 per cent in 2020.

In 2021, Indonesia’s economic growth began to show signs of recovery, as indicated by economic growth of 3.70 per cent.

After facing the Covid-19 pandemic, Indonesia was able to recover with economic growth of 5.31 per cent (yoy) in 2022. The recovery condition continued with Indonesia’s economic growth of 5.05 per cent (yoy) and made Indonesia an Upper-Middle Income Countries (UMIC) country as indicated by the GNI per Capita value of US$4,870 by 2023.

Furthermore, economic growth for the first semester of 2024 was consistently above 5 per cent, with a cumulative achievement of 5.08 per cent.

In Semester I of 2024, Indonesia’s economic growth from the expenditure side showed a positive performance. The components of household consumption and consumption of Non-Profit Institutions Serving Households (LNPRT) grew by 4.92 and 16.84 per cent (ctc) respectively.

This was driven by sustained public consumption activity during the National Religious Holidays (HKBN) and school holidays, as well as increased political activity in the 2024 political year. The export component also grew positively by 4.73 per cent (ctc).

In terms of business sector, all sectors supporting economic growth grew positively in Semester I of 2024. The government administration sector and the health services and social activities sector were the highest growing sectors with double-digit growth of 10.25 and 10.03 per cent (ctc) respectively.

This was driven by activity during the religious and school holiday seasons, as well as government-imposed leave. Meanwhile, the manufacturing sector grew by 4.04 per cent (ctc), supported by increased demand in the non-oil and gas sector industries, such as the food and beverage, basic metal, chemical and pharmaceutical industries.

The achievement of Indonesia’s economic growth cannot be separated from the policies formulated and implemented by the government. For example, in 2020 and 2021, the Indonesian government issued the National Economic Recovery Programme (PEN) in order to boost the national economy again. In addition, the government also passed the Job Creation Law to provide certainty in investment and support the national labour market.

Source : Bappenas