Jakarta, CNBC Indonesia – The presidential and vice presidential candidates contesting the 2024 presidential election have set a target for Indonesia’s economic growth in the range of 6-7% if they win and become leaders of the country in the next five years.
However, former World Bank Managing Director Mari Elka Pangestu considers that the target level of economic growth of 6-7% will be difficult to achieve, because world economic conditions are currently weakening evenly and will last for a long period of time.
“If we look at analysis from various sources, the global economic prospect (World Bank), the IMF. The problem is not just a slowdown in growth, and this is not cyclical, but this is secular, secular slowdown in economic growth for the rest of this decade,” said Mari at LPEM FEB UI, Jakarta, Friday (27/10/2023).
“And if in Indonesia we think 5% is too low, that’s actually very good, but if we hope for 6-7% in this decade it might be a bit difficult,” stressed Mari.
Apart from the world currently being in a prolonged period of weakness, Mari assesses that the world in the future will also face a lot of pressure or shock compared to previous periods. So, what Indonesia needs now is to maintain sustainable growth, not force growth to increase.
“The world will face more shocks than in previous periods, whether it is climate shock, health shock, economic shock, financial crisis, so we have to be resilient, the importance of resilience is related to the shock that will be experienced,” he said.
For information, the International Monetary Fund (IMF) estimates that global growth will decline from 3.5% in 2022 to 3.0% in 2023 and 2.9% in 2024.
In the series of Annual Meetings of the International Monetary Fund and World Bank (IMF-World Bank), it was also revealed that current global economic pressures are influenced by the long-term consequences of Covid-19, the war in Ukraine and increasing geoeconomic fragmentation, the impact of tight monetary policy in order to overcome inflationary pressures, reduced fiscal stimulus due to already high debt levels, and the implications of extreme weather.
In the midst of these conditions, the 2024 presidential and vice presidential candidates, such as Anies Baswedan-Muhaimin Iskandar, are targeting Indonesia’s economic growth to be at the level of 5.5%-6.5% during their leadership period, then Ganjar Pranowo-Mahfud MD stated a promise of 7% economic growth, and Prabowo-Gibran did not set a growth target in their vision and mission document.
[Gambas:Video CNBC]
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