Indonesia has achieved an impressive milestone in 2024 by securing the 8th position among the world’s largest economies based on Gross Domestic Product (GDP) adjusted for Purchasing Power Parity (PPP).
This ranking, reported by the International Monetary Fund (IMF), highlights Indonesia’s ability to outperform two advanced economies, France and the United Kingdom.
Globally, China continues to lead with a GDP of USD 37.07 trillion, followed by the United States and India in second and third positions, respectively.
Russia and Japan occupy the fourth and fifth spots, while Germany and Brazil are ranked sixth and seventh. Indonesia claimed the 8th position with a GDP of USD 4.66 trillion, ahead of France and the UK, whose GDPs stand at USD 4.36 trillion and USD 4.28 trillion, respectively.
Indonesia’s Economy to Grow by 5.1% in 2025
The IMF projects Indonesia’s economy to grow by 5.1% year-on-year (YoY) in 2025, this is higher than the global economy growth projection with 3.3% YoY.
This projection remains consistent with its October 2024 forecast, as stated in the January 2025 World Economic Outlook (WEO) Update. The Central Statistics Agency (BPS) is expected to release the report in early February 2025.
This achievement signifies Indonesia’s ability to maintain stable economic growth despite global challenges such as the pandemic and economic uncertainties.
Indonesia’s economic success is attributed to key factors such as the robust manufacturing sector, strong commodity exports, and increased foreign investment.
Additionally, government policies supporting growth, including infrastructure development and investment incentives, have bolstered the country’s global standing.
Budget Management Strengthens Economy
Prof. Didin S. Damanhuri, Chairman of the Expert Council at ASPRINDO, emphasized the importance of efficient budget management, tax reductions, and fostering the development of Micro, Small, and Medium Enterprises (MSMEs).
He also highlighted the potential revenue from natural resource management, which could reach approximately IDR 1,000 trillion.
According to him, palm oil alone could contribute around IDR 300 trillion, while coal could add up to IDR 600 trillion. Proper management of these industries could significantly enhance Indonesia’s GDP.
Global Economic Growth Projections
The IMF forecasts moderate economic growth across various regions:
• Asia: Economic growth is expected to improve but remains below the October 2024 projection.
• Europe: Gradual economic recovery is anticipated, though geopolitical tensions will continue to be a key factor.
• United States: The U.S. economy is projected to grow 0.5 percentage points higher than previous forecasts, supported by strong demand, a robust labor market, favorable financial conditions, and accelerated investments.
Globally, the IMF predicts economic growth of 3.3% YoY in 2025 and 2026, which is slightly below the historical average of 3.7% (2000–2019). Meanwhile, global inflation is expected to decline to 4.2% in 2025 and further to 3.5% in 2026, nearing pre-pandemic levels.
The IMF underscores the need for focused policy measures to balance inflation with real-sector activity, rebuild economic buffers, and boost medium-term growth through structural reforms and enhanced multilateral cooperation.
While economic stability varies across nations, the global economic outlook remains resilient overall. According to the October 2024 WEO, global GDP growth in Q3 2024 was slightly lower than anticipated, influenced by weaker-than-expected performance in parts of Asia and Europe.
Sources: Merdeka.com, Liputan6.com, MediaIndonesia.com
Photo Credit: Affan Fadhlan via unsplash.com
