Indonesia’s economy grew by 4.95% year-on-year in the third quarter of 2024, reflecting a 1.5% increase compared to the previous quarter, and 5.03% growth year-to-date. This positive performance comes despite ongoing global challenges such as geopolitical tensions, geo-economic fragmentation, and a global economic growth projection of just 3.2% for both 2024 and 2025, below historical averages. Minister of Economic Affairs, Airlangga Hartarto, acknowledged that the third quarter typically shows a slight decline due to the absence of major events like holidays or religious celebrations. However, he remained optimistic about Q4 performance, stating that with 5.03% growth year-to-date, the economy could still meet the government's 5% growth target for 2024. Indonesia’s inflation remained under control at 1.71% in October, well within the target range, while the country's debt-to-GDP ratio stood at a manageable 39.4% in June 2024.
The third-quarter growth was driven by strong household consumption, which increased by 4.91%, contributing 2.55% to overall growth, mainly due to higher spending in the hospitality and restaurant sectors. Investment also grew by 5.15%, fueled by both government and private sector infrastructure projects. All sectors saw positive growth, with transportation and warehousing rising by 8.64%, supported by increased passenger traffic and goods shipments. Additionally, the food and beverage sector grew by 8.33%, driven by higher foreign tourist arrivals and events like MotoGP Mandalika. On a regional level, Java, Kalimantan, Bali, and the Lesser Sunda Islands (Nusra) saw stronger growth compared to Sumatra, Sulawesi, and Maluku-Papua. Airlangga highlighted the government's policies to sustain this growth into the final quarter, including measures to maintain purchasing power, expand housing credits, promote entrepreneurship, and further develop natural resource processing. The government is also focused on enhancing competitiveness through strategic infrastructure projects and tax incentives to attract investment.
