Jakarta (ANTARA) - The economic growth of Jakarta, the capital of Indonesia, has been a hot topic every now and then. This is understandable since Jakarta’s economic growth can significantly affect the national economic growth figure.

Jakarta’s contribution is reflected in the city's iconic slogan of “Jakarta’s Success in Indonesia’s Success,” which underlines the government’s resolve of translating the capital’s success into the success of the whole nation.

Jakarta has been the center of Indonesia’s national activities, supported by its status as the country’s seat of government, center of economy, as well as gateway of investment.

Jakarta’s economic growth increased to 5.13 percent in the second quarter of this year, an increase of 0.18 percentage points from 4.95 percent growth in the first quarter.

Head of Bank Indonesia’s (BI’s) Jakarta Representative Office, Arlyana Abubakar, said that the economic boost has been the result of the high level of mobility and activity of Jakarta residents and the mounting frequency of national and international events in the city.

The positive economic growth trend has also been supported by household consumption, investments, and spending by government agencies.

In particular, household consumption has contributed as much as 63 percent to economic growth, while investment and government spending have accounted for 33.3 percent and 13 percent of the growth, respectively.

Jakarta is also enjoying a positive trend owing to the controlled inflation rate.

In July 2023, the capital city’s inflation was recorded at just 2.81 percent, lower than the previous month’s figure of 3.2 percent. The figure was also lower than the national inflation rate of 3.08 percent.

Bank Indonesia has expressed optimism that the inflation rate in regions, especially Jakarta, will continue to remain at a stable level.

Global business city

Jakarta is believed to possess promising economic capital that can help retain the city’s status as a global-level business city after the planned relocation of Indonesia’s seat of government to the new capital Nusantara in East Kalimantan province.

Surrounded by several industrial buffer regions – Bogor, Depok, Tangerang, Bekasi – Jakarta is expected to continue demonstrating its economic might as a global city of business, added to the fact that it has adequate essential infrastructures, such as toll roads, ports, international-level airports, and an integrated mass transportation system.

In order to retain its status as a global-level business city, Jakarta needs to ensure that its government and people are ready to enhance their synergy, commitment, and determination.

Contributions of Jakarta

The Investment Ministry/Investment Coordinating Board (BKPM) revealed that during the January–June 2023 period, Jakarta generated as much as Rp40.6 trillion (US$2.6 billion) in domestic investment, contributing 12.9 percent to the country’s overall domestic investment realization and making the city the most significant contributor nationally.

Moreover, Jakarta’s foreign investment realization during the same period was recorded at Rp38.9 trillion (US$2.6 billion), accounting for 10.7 percent of the total national realization.

Thus, the capital city recorded a cumulative investment realization figure of Rp79.5 trillion (US$5.2 billion) during the first half of 2023.

The three groups of sectors with the highest share of contribution to Jakarta’s domestic and foreign investment realization were transportation, warehouse, and communication with Rp29.11 trillion (US$1.9 billion); other services with Rp15.89 trillion (US$1.04 billion); as well as residential, industrial, and office zones with Rp11.16 trillion (US$730 million).

Among the seven administrative regions in the capital, South Jakarta emerged as the most prominent contributor to the city’s investment realization with a cumulative value of Rp40.5 trillion (US$2.6 billion).

It was followed by North Jakarta’s contribution of Rp8.97 trillion (US587.5 million), East Jakarta’s Rp7.54 trillion (US$493.8 million), West Jakarta’s Rp7.35 trillion (US$481.4 million), Seribu Islands’ Rp29.85 billion (US$1.9 million).

The total value surpassed the target by 155 percent. The feat was inseparable from the efforts made by Jakarta’s Investment and One-Stop Integrated Service Office to provide investors with a higher level of convenience in obtaining permits and conducting economic activities, in accordance with the directives outlined by the acting governor of Jakarta, Heru Budi Hartono.

In order to further boost the surge in investment in the capital city, the Jakarta government is committed to providing the public with high-quality, quick, superior, and errorless services.

By maintaining its positive economic growth trend, Jakarta can worry less about its status as a center of national economic growth slipping away after the relocation of Indonesia's capital to Nusantara.

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Translator: Redemptus E, Tegar Nurfitra
Editor: Azis Kurmala
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