Annisa Febiola, Jakarta – Bhima Yudhistira, executive director of the Center of Economic and Law Studies (Celios), criticizes presidential candidates' economic growth targets that he deemed too high. Met on February 1, he said that the high growth targets set by the candidates were unrealistic as they were too optimistic.
Economic growth targets are a part of the campaign promises of presidential and vice presidential candidates. Anies Baswedan and Muhaimin Iskandar have set an economic growth target of 5.5 to 6.5 percent, while Ganjar Pranowo and Mahfud MD are targeting growth at 7 percent.
Prabowo Subianto and Gibran Rakabuming Raka have an economic growth target of 6 to 7 percent. However, on Thursday, January 31, Prabowo said that he could bring Indonesia's economic growth up to 8 percent.
The Central Statistics Agency recorded Indonesia's economic growth at 4.94 percent as of the third quarter of 2023.
Bhima said that global economic conditions are currently under pressure, thus overly-high growth targets are quite unrealistic. Moreover, he said, in the next three years Indonesia's important economic partner, China, is expected to experience lower growth.
The second reason concerns sources of commodity profits that are difficult to estimate. "This means that with an economic structure that still depends on primary processing, it is very difficult to hope that the prices leading export goods to rise at an international level," said the economist.
Another issue is early deindustrialization, which is the main homework for presidential candidates. Bhima said that industry and manufacturing are the foundation for higher growth, but unfortunately, Indonesia's manufacturing portion is less than 30 percent, far from ideal.
He is also worried about the candidates' programs, which he deems to require large amounts of funding. This will cause Indonesia to issue large amounts of debt and there will be a struggle for liquidity in the financial markets that will disrupt credit distribution to the real sector, which is vital to spur economic growth.