JAKARTA (AFP) – Indonesia’s economy grew more than expected last year, the government said yesterday, as a pick-up in trade, mining and agriculture helped offset ongoing global headwinds.
The 5.03 per cent expansion in Southeast Asia’s largest economy topped estimates in a survey of economists by Bloomberg, while the 5.02 per cent growth enjoyed in the final three months of the year was also better than expected.
“All sectors grew positively in 2024. The sectors that gave the biggest contribution to the economy were processing, trade, agriculture, construction and mining,” head of Statistics Indonesia Amalia Adininggar Widyasanti said in a news conference.
However, the annual figure marked a slight slowdown from the 5.05 per cent seen in 2023 and was well short of the government’s 5.2 per cent target.
Indonesia was badly affected by the COVID-19 pandemic, with its key export and tourism sectors taking a massive hit in 2020 – suffering its first recession since the 1997 Asian financial crisis.
While the economy has slowly recovered it is well short of the government’s target of eight per cent growth by the end of President Prabowo Subianto’s term.
Still, Prabowo said last month he remained confident that figure could be reached through cost-cutting and efficiency.
But economists and other government agencies did not share the same optimism.
Bank Indonesia, the central bank, has projected growth will slow further this year owing to lower domestic demand and slowing exports.
Monetary policymakers have steadily raised interest rates to defend the rupiah amid growing global economic uncertainty and rising inflation.
Analyst Gareth Leather at Capital Economics said, “Looking ahead, the official data will probably continue to show growth of close to five per cent.”
“However, we expect growth to slow on our measure of activity as the impact of lower commodity prices and subdued global demand offsets the boost from lower interest rates,” he said.
