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December 31, 2024 | 07:49 pm
TEMPO.CO, Jakarta - The International Monetary Fund (IMF) recently commended Indonesia's economic progress in a recent article. The Washington D.C.-based institution highlighted the nation's extraordinary transformation over the past two decades in its publication, "In the Trenches: Relentless Reformer," featured in the IMF's Finance and Development Magazine and subsequently shared on their official Instagram account on December 29, 2024.
"Over the past two decades, Indonesia has undergone a remarkable transformation," the article begins.
The IMF report underscored Indonesia's substantial economic growth, noting a four-fold increase in Gross Domestic Product (GDP) to reach US$1.4 trillion. Furthermore, the institution emphasized a reduction in poverty, with the proportion of Indonesians living below the poverty line (defined as living on less than US$2.15 per day, equivalent to approximately Rp34,725 at the current exchange rate) declining tenfold. This translates to a poverty rate of less than two percent.
The IMF article also drew attention to the rising standard of living in Jakarta. "In Jakarta, the capital, the average income is about the same as in Poland and not far off from Portugal," they wrote.
Coordinating Minister for Economic Affairs Airlangga Hartarto welcomed the IMF's positive assessment, viewing it as a testament to Indonesia's success in maintaining its economy and a strong signal for continued international investment.
"This confirms Indonesia's success in maintaining strong economic fundamentals and at the same time, serves as a signal to the world to continue investing in Indonesia," Airlangga stated in a written statement on Monday, December 30, 2024.
According to the IMF's October 2024 World Economic Outlook, the global economic growth forecast for 2024 is projected at 3.2 percent, with a projected stagnation at 3.2 percent in 2025. Developed economies are expected to experience a 1.8 percent growth in 2025, while developing economies are projected to achieve a growth rate of 4.2 percent.
Meanwhile, the IMF projects Indonesia's economic growth to reach 5.7 percent annually from 2025 to 2029. This projection is based on the October 2024 edition of the World Economic Outlook. Following a 4.95 percent growth in the third quarter of this year, the Indonesian economy is projected to expand by 5.7 percent in 2025.
The IMF's projection, however, falls below the government's target outlined in the 2025 State Budget Draft, which anticipates economic growth ranging from 5.1 to 5.5 percent next year, gradually increasing to 5.8 to 6.6 percent by 2029. Furthermore, the IMF's projection is lower than President Prabowo Subianto's target of achieving 8 percent economic growth.
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