INDEF's projection is lower than the macro assumption in the 2024 State Budget of 5.2 percent.
"According to INDEF's calculations, the 2024 economic growth is not high as the macro assumption because of the many difficult challenges," Listiyanto remarked at the 2024 Indonesian Economic Projection Seminar monitored here on Wednesday.
The national economic growth is expected to slow down next year in line with slowing global economic growth due to the geopolitical crisis between Russia and Ukraine as well as between Israel and Palestine that is expected to continue in 2024.
"For us, (economic growth) of 4.8 percent is not too bad, because the global economic growth alone is predicted to be 2.8 percent. We are almost twice the global level, this is not recession, but not accelerated too," Listiyanto explained.
The economist remarked that the INDEF had projected the people's purchasing power to decline in 2024 and credit growth to the real sector to moderate due to Bank Indonesia's high benchmark interest rate and windfall from the rising commodity prices to end.
Fiscal efforts to accelerate economic growth are expected to not be optimal, considering the pattern of budget distribution that always accumulates at the end of the fourth quarter.
Meanwhile, inflation in 2024 is expected to reach 3.2 percent, above the macro assumption of the 2024 State Budget of 2.8 percent, mainly contributed by rising food price volatility.
Lastly, Listiyanto remarked that food demand in 2024 will increase due to the holding of general elections, while food production might decrease due to the weather influence and declining credit to food business actors.
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Translator: Sanya S, Kenzu
Editor: Azis Kurmala
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