TEMPO.CO, Jakarta
Coordinating Minister for Economic Affairs, Airlangga Hartarto, recently addressed the challenges facing Indonesia under President Prabowo Subianto’s administration. Hartarto highlighted the ongoing risks that could impact the country’s future economic stability.
Global Dynamics and Economic Volatility
According to Hartarto, global economic dynamics remain a critical factor influencing Indonesia’s economic growth. He specifically mentioned two major risks: commodity price volatility and elevated interest rates. These factors can significantly affect domestic economic conditions.
“Volatility in commodity prices and interest rates around the world will continue to pose challenges,” Hartarto stated during the High-Level Meeting of the Central Inflation Control Team (HLM TPIP) in Central Jakarta.
Trade Policies and Climate Change
Hartarto also pointed out that trade policies from the United States could have a substantial impact on Indonesia’s economy. He referred to these policies as “Trump 2.0,” suggesting ongoing uncertainties in international trade agreements could affect domestic business operations.
Furthermore, Hartarto emphasized the growing importance of addressing climate change. He highlighted that environmental challenges, particularly in food and energy sustainability, could exacerbate economic vulnerabilities.
Global Economic Projections
The coordinating minister provided insights into global economic projections for 2025. According to an International Monetary Fund (IMF) World Economic Outlook (WEO) update, global growth is forecasted to be around 3.2 percent, which is below the historical average of 3.7 percent from 2000 to 2019.
“Considering the global economic atmosphere, it is crucial for us to remain vigilant and prepared for any potential challenges,” Hartarto said.
Indonesia’s Economic Standing
Despite the challenges, Hartarto highlighted Indonesia’s impressive economic achievements. The country has entered the top stratum of nations based on purchasing power parity (PPP)-adjusted Gross Domestic Product (GDP), ranking 8th globally.
“This accomplishment places Indonesia above countries like Italy and France, making it a noteworthy milestone in our economic journey,” he noted.
The IMF reported Indonesia’s per capita GDP in 2024 at $4.98 trillion, based on purchasing power parity. This measure, which accounts for standard of living and price differences between countries, is crucial for comparing economies accurately.
Global GDP Rankings
China holds the top position in the global GDP ranking based on PPP, with a GDP of $37.07 trillion. The United States follows closely with $29.17 trillion. India takes third place at $16.02 trillion, and Russia is ranked fourth with a GDP of $6.9 trillion. Japan occupies the fifth spot with a GDP of $6.57 trillion.
Germany and Brazil follow in sixth and seventh positions with GDPs of $6.02 trillion and $4.7 trillion respectively. Indonesia rounds out the top ten, with a GDP of $4.66 trillion. France and the United Kingdom complete the list in the ninth and tenth positions, with GDPs of $4.36 trillion and $4.28 trillion.
“These rankings underscore Indonesia’s strong economic performance and position us well on the global stage. It is essential that we sustain this momentum and continue to work towards economic growth,” Hartarto concluded.
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