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Sectoral and Regional Group​​ DKEM

6/7/2024 12:00 AM
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 Nusantara Report April 2024


Lapnus April 2024.png​Regional economic gains recorded in the first quarter of 2024 were driven by Sumatra, Java and Sulampua, contrasting economic moderation in the Kalimantan and Balinusra regions. The regional economies of Sumatra and Java accelerated on the back of private consumption, particularly household consumption. Meanwhile, economic improvements in the Sulampua region stemmed more from a growing contribution of net exports and investment. Departing from conditions in Sumatra and Java, economic moderation in the Kalimantan region was influenced by the normalisation of government spending relating to the development of the new capital city (IKN). In the Balinusra region, the economic slowdown was attributable to the completion of tourism infrastructure projects. Economic improvements in most regions were also reflected by the stronger performance of several economic sectors. Furthermore, higher private consumption in all regions induced gains in the trade sector and manufacturing industry in various regions. In Sulampua, improvements in terms of net exports and investment buoyed strong growth of the mining sector and manufacturing industry in the first quarter of 2024.

Overall, economic performance in most regions is projected to post limited gains in 2024, with moderation expected in Kalimantan. Household consumption, along with general and local elections, will support economic improvements in most regions. Specific to the Java region, improving household consumption will have a large multiplier effect on higher sectoral output in other regions. In contrast, economic improvements in Sulampua will stem more from exports and investment. Meanwhile, economic moderation is only anticipated in the Kalimantan region as the Government normalises spending related to development of the new capital city (IKN), despite a promising export outlook. The performance of major economic sectors in each region has confirmed limited economic gains. Developments in the main regional economic sectors are divergent, as reflected by sluggish improvements in the tertiary sector amid stronger gains recorded in the manufacturing industry, except in Sulampua. Economic developments in several regions have strengthened indications of restrained national economic improvements in Indonesia in 2024.

Composite Consumer Price Index (CPI) inflation for cities in all regions of Indonesia remained manageable in the first quarter of 2024. Nationally, CPI inflation in the first quarter of 2024 was recorded at 3.05% (yoy), which is still within the national target corridor despite the increase compared with conditions in the previous period. The build-up of inflationary pressures was primarily influenced by Volatile Food (VF) as a corollary of limited supply after the harvesting season was delayed. Meanwhile, Core Inflation was still under control in the first quarter of 2024, and Administered Prices (AP) fell in all regions. Spatially, inflation in 13 provinces exceeded the target range, with the highest rate recorded in West Papua at 4.78% (yoy).

CPI inflation is expected to remain under control and within the 2.5%±1% target in 2024, supported by synergy between Bank Indonesia and the Government. Spatially, CPI inflation in all regions is also forecast to remain manageable. Bank Indonesia will continue orienting its policy mix towards consistently maintaining rupiah stability, as a preemptive and forward-looking measure to ensure inflation remains within the target range. In addition, Bank Indonesia will continue strengthening policy coordination with the (central and regional) Government and other strategic partners through the National Movement for Food Inflation Control (GNPIP) in various regions within the Central and Regional Inflation Control Teams (TPIP and TPID). Coordination will be strengthened to manage volatile food inflation against a backdrop of productivity issues and intertemporal supply imbalances, which remain an ongoing concern. Synergy with the Government will be strengthened to accelerate payment system digitalisation, thereby boosting economic efficiency and supporting efforts to manage core inflation. Part III of this edition of the Nusantara Report explores the strategic issue of “Strengthening the Regional Payment Ecosystem to Support the National Digital Economy and Finance".

Moving forward, rapidly changing global economic dynamics and increasing uncertainty will continue to demand vigilance. The stronger economic growth anticipated in the United States (US) will impact the monetary policy stance of the US Federal Reserve. Furthermore, such improvements have boosted economic growth in India on the back of external performance. Meanwhile, the economic outlook for China remains sluggish. International commodity prices are forecast to increase due to limited production and supply triggered by inclement weather and deepening geopolitical tensions, including Israel-Iran. Such factors could exacerbate global financial market uncertainty and the world economic growth outlook and, in turn, impact the economic outlook in various regions of Indonesia.​​​


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Halaman ini terakhir diperbarui 6/7/2024 6:16 PM
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