Permata Bank, through the Permata Institute for Economic Research (PIER), launched its Economic Outlook 2025 report on Tuesday, December 3, 2024.
The report titled “Economic Forces at Play: Balancing Domestic Drivers and Global Uncertainty”.
It projects that global economic growth in 2025 will remain stable at 3.2%, although there is a difference in the growth rate between developed and developing countries.
Supported by Household Consumption and Investment
For the Indonesian economy, the projected growth is 5.15% in 2025, with inflation expected to remain within Bank Indonesia’s target of 3.12%.
Nonetheless, the policy of increasing VAT and excise rates by 12% on plastics, cigarettes, and sugary drinks is expected to put pressure on domestic inflation.
Josua Pardede, Chief Economist of Permata Bank, stated this optimistic projection provides a strong foundation to encourage sustainable economic growth, focusing on 3 key areas:
• Household consumption
• Export diversification
• Attracting foreign direct investment
Josua also emphasized the importance of coordinated fiscal and monetary policy support to maintain Indonesia’s economic stability amid global uncertainty.
According to him, utilizing Indonesia’s domestic potential is the key to facing economic challenges due to global dynamics.
U.S Trade Policy & Global Impact on Economy
In the United States, domestic policy is expected to cause inflation to remain above the Federal Reserve’s target of 2%, making room for a potential rate cut of 50 bps in 2025, to 3.75%-4.00%.
In addition, global energy prices are expected to continue their downward trend from 2022.
Meanwhile, Indonesia’s main commodities, including crude oil, coal, and CPO, are projected to decline due to increased crude oil production, limited coal demand, and normalization of CPO production.
Josua Pardede also added that despite external risks, such as US protectionist policies and commodity price volatility, Indonesia’s economic growth projection remains positive.
Indonesia’s inflation is estimated to remain under control at 3.12%, despite the impact of the VAT increase and the implementation of new excise.
According to Liputan6.com, Donald Trump, who won the 2024 United States presidential election, has a characteristic of his political and economic policy, namely, “Make America Great Again”.
It reflects the main focus on protectionist policies and trade wars with other countries, especially with China.
Strong Rupiah and Government Support
Economist at the Center of Macroeconomics & Finance Indef, Abdul Manap Pulungan, assessed that the trade protection promoted by Trump has potential to create a major impact.
The trade war between the United States and China, for example, not only has an impact on both countries, but also affects other countries involved in global supply chains.
This economic uncertainty arises due to protection policies that can slow down economic growth in various countries, including Indonesia.
In addition, the rupiah exchange rate is expected to strengthen in the range of Rp 15,200 to Rp 15,770 per USD, driven by foreign direct investment flows and portfolios.
The government is also expected to continue to support investment growth with fiscal policies that support MSMEs and reduce borrowing costs.
