Indonesia maintains strong economic growth amidst global economic slowdown. National economic growth reached 5.11% in Q1 2024. Coordinating Minister for Economic Affairs Airlangga Hartarto stated that the government has implemented various strategies to boost economic growth, including flexible, responsive, and accommodating fiscal and monetary policies aimed at stimulating consumption and investment. "Aligned with our efforts to improve the investment climate, Indonesia has enhanced tax incentives to attract both foreign and domestic investments to the country," Airlangga said in a statement on Wednesday, 19 May. The European Union (EU) and its member states play a crucial role in Indonesia's foreign trade and investment. In 2023, total trade amounted to USD 30.8 billion, with EU investments in Indonesia over the past five years (2019-2023) reaching US$12.1 billion. Negotiations on the Indonesia-EU Comprehensive Economic Partnership Agreement (CEPA) are being accelerated to enhance economic cooperation further.
Once finalized, the agreement is expected to elevate the Indonesia-EU partnership to new heights, facilitating access to new markets, boosting trade between the EU and Indonesia, and expanding direct investments. "All these negotiations are crucial for both parties, and President Joko Widodo has directed swift agreement to enhance investment and provide greater welfare to the people," he explained. Indonesia is also the first ASEAN member to initiate the OECD accession process, potentially becoming the OECD's third Asian member after Japan and Korea. Accession to the OECD is expected to catalyze the formulation or refinement of superior policies and regulations. "Thailand is also following suit, and our entry from Southeast Asia will strengthen the OECD, as it needs global south partners like us. Concrete steps must be taken, and I expect European business communities to cooperate going forward, ensuring EuroCham's contribution to Indonesia remains loud and clear," concluded Minister Airlangga.
