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| A national seminar on "The Urgency of Industrialization in Achieving the 8 Percent Growth Target" is held by the Center of Reform on Economics (CORE) Indonesia in Jakarta, Wednesday (Oct 16, 2024). (Doc. ANTARA) |
PEWARTA.CO.ID - The National Development Planning Agency (Bappenas) has outlined two strategies to reach the ambitious goal of eight percent economic growth, a target set by Indonesia's President-elect Prabowo Subianto.
This announcement was made during a national seminar organized by the Center of Reform on Economics (CORE) Indonesia, where Amalia Adininggar Widyasanti, Deputy for Economic Affairs at Bappenas, explained the proposed scenarios.
The Need for Accelerated Growth
Widyasanti highlighted the importance of achieving at least six percent economic growth annually to help Indonesia break free from the middle-income trap, a long-standing challenge for developing economies.
She emphasized that Prabowo’s vision of achieving eight percent economic growth would expedite Indonesia’s path to higher income levels and broader economic prosperity.
"If you want eight percent in the first five years (in office), that is fine. It is even better because it can speed things up. Our job at Bappenas is to execute that," she stated, reinforcing the agency’s commitment to realizing the vision set by the President-elect.
First Scenario: Gradual and Consistent Growth
In the first proposed scenario, the approach is to gradually increase economic growth over the course of Prabowo's five-year term.
The objective is to reach the eight percent target in a steady and sustainable manner. Widyasanti detailed the projected growth for each year of Prabowo's administration:
- In 2025, growth is expected to reach 5.7 percent.
- In 2026, growth will increase to 6.4 percent.
- By 2027, the economy is projected to expand by 7.0 percent.
- In 2028, it will rise to 7.5 percent.
- Finally, in 2029, the goal is to achieve 8.0 percent.
"Hence, the first scenario is eight percent at the end. The first year (2025) is 5.7 percent, the second year (2026) is 6.4 percent, the third year (2027) is 7.0 percent, the fourth year (2028) is 7.5 percent, and the last year (2029) is 8.0 percent," she elaborated, outlining the path towards reaching the target.
Second Scenario: Accelerated Growth in the Mid-Term
The second scenario proposed by Bappenas aims to accommodate President-elect Prabowo's aspiration for faster economic acceleration by focusing on significant growth in the middle of his term.
This approach targets higher growth in the third and fourth years of his presidency, aiming for a peak of 8.3 percent in 2027.
The growth rate would then stabilize at eight percent in 2028, followed by a slight dip to around 7.8 percent in 2029. The average growth over the five-year period would be approximately 7.7 percent.
"Thus, the average for the five years is expected to be around 7.7 percent," Amalia noted, explaining the broader impact of this accelerated growth scenario.
Expert Perspective on the Growth Target
During the seminar, senior economist Hendri Saparini from CORE Indonesia also stressed the importance of achieving high economic growth to avoid the middle-income trap.
She pointed out that while the new government is pushing for eight percent growth, Indonesia’s economic growth has been slowing down in recent years, which poses a significant challenge.
"We are facing a new government target of eight percent. However, our average growth is getting lower and lower. We need to change this condition because we need to move towards eight percent," she remarked, urging for immediate measures to reverse the current economic trend.
Government’s Target for 2025
According to the law concerning the 2025 State Budget, the government is targeting a more modest economic growth rate of 5.2 percent for the upcoming year.
This baseline growth target reflects the government’s cautious approach, though the strategies proposed by Bappenas aim to gradually increase this rate over the following years to meet the ambitious eight percent target.
By implementing these scenarios, Bappenas hopes to drive Indonesia's economy toward a new phase of robust growth, ultimately helping the country overcome long-standing challenges and paving the way for greater economic prosperity under the leadership of President-elect Prabowo Subianto.
