Nabiila Azzahra A, Jakarta – Indonesian President Prabowo Subianto targets Indonesia's economic growth to reach 8 percent during his term. Far from that target, the International Monetary Fund (IMF) predicts that Indonesia's economic growth will only reach 5.7 percent by 2029. Economist Bright Institute, Awalil Rizky, explains that achieving 8 percent growth is impossible without fundamental policy changes.
The IMF's projection is outlined in the October 2024 edition of the World Economic Outlook document. Based on the report, Indonesia's economy is predicted to grow 5.7 percent next year, after growing 4.96 percent this year. Meanwhile, for 2026, the projection for economic growth is 5.6 percent, and for 2027 it is 5.7 percent. Then in 2028, Indonesia's economy is forecasted to grow 5.6 percent and further 5.7 percent in 2029.
This projection is lower than the government's projection outlined in the Draft State Revenue and Expenditure Budget (RAPBN) Financial Note for 2025, ranging from 5.1-5.5 percent next year and growing up to 5.8-6.6 percent by 2029.
"In my opinion, the likelihood of achieving 8 percent based on this IMF projection is non-existent. Impossible. If you want to change it, there must be fundamental changes," said Awalil in the webinar "IMF Projection: Indonesia's Economy Not Glowing" held on Tuesday, October 29, 2024.
Although the IMF projection is far below the RI government's target, Awalil interprets the prediction as still relatively optimistic because it is not far from the average of peer countries in Asia. In its report, the IMF also projects other indicators such as inflation, unemployment rate, state budget deficit, debt, and current transactions.
Based on Awalil's analysis of these indicators, there is a possibility that Indonesia's economy will not fare well. Some indicators such as unemployment rate and investment up to 2029 are predicted to be unfavorable. "The IMF projection shows that Indonesia's economy is actually vulnerable if there are unexpected events, external shocks," he said.
He then suggests that the government should not pursue the 8 percent figure, but rather aim for the quality of economic growth itself. According to him, quality economic growth criteria mean increased production and balance in society. "If the Prabowo administration can achieve an average of 6 percent very high-quality growth, if he lives long and the people accept that good change, then we can talk about 8 percent in his second term," he said.