Jakarta. Indonesia’s economy remains robust amidst the global challenges as the Southeast Asian country saw a 5.11 percent year-on-year growth in the first quarter of 2024, according to Finance Minister Sri Mulyani.

The minister attributed this growth to the strong domestic demand and the state budget. As Indonesia’s economy grows, the lower the country’s unemployment rate, even reaching the pre-pandemic level. Indonesia’s GDP at constant price reached Rp 3,112.9 trillion (around $190 billion) in Q1-2024. The country’s GDP at current prices stood at around Rp 5,288.3 trillion that period. Indonesia recorded a contraction of around 0.83 percent on a quarter-to-quarter basis.

Sri Mulyani said that the global risks that Indonesia had to face were The Fed’s uncertain policies, geopolitical tension, and disruptions over the global supply chain.

For this reason, the government will keep an eye on the potential impacts of global dynamics. Indonesia will make the best use out of its state budget as a shock absorber to maintain the people’s purchasing power and the economic growth momentum.

“Going forward, we will continue to make the best of our state budget to keep the economic stability, spur growth, and generate jobs,” Sri Mulyani was quoted as saying in a recent press statement. 

According to Bank Danamon economist Irman Faiz, Indonesia’s economy is expected to grow at a slower pace at 4.9 percent yoy in the second quarter of 2024. This is set to result in a 5 percent growth for the entire year. Irman said that some of the growth boosters for Q1-2024 were factors that only happened once: a single-round election, a Ramadan that took place early March, and faster distribution of social securities.

“Going forward, domestic growth may face challenges related to higher and prolonged interest rates, which will eventually weaken the global and domestic demand,” Irman said.