3-7-2023 (JAKARTA) Indonesia has regained its position in the upper-middle income category of countries, propelled by a strong post-pandemic recovery, according to the World Bank. This development puts Indonesia back on track towards achieving its goal of attaining high-income status.
Based on the latest classifications from the World Bank, Indonesia’s gross national income per capita has risen to $4,580, surpassing the previous figure of $4,140. This marks a significant improvement from the lower-middle income status that the country held for two consecutive years in 2021 and 2022.
The World Bank highlighted Indonesia’s robust post-pandemic recovery, with real GDP growing by 5.3% this year. The nation experienced its fastest economic expansion in nine years during 2022.
In 2020, Southeast Asia’s largest economy initially achieved upper-middle income status, only to be downgraded in the following year due to the severe impact of the global pandemic. However, as the country gradually reopened its economy, consumption and employment began to recover. Additionally, the global commodities boom provided a boost to exports, acting as an additional driver of growth.
The recent ranking reaffirms Indonesia’s ambition to become a high-income country by 2045, a key focus of President Joko Widodo’s economic agenda. Widely known as Jokowi, the outgoing president has implemented measures such as social assistance programs, inflation control, and the resumption of public activities to revitalize the domestic economy after the pandemic.
Sustaining Economic Growth
During a cabinet meeting on Monday, President Jokowi emphasized the need for steps to sustain economic growth, including the control of food prices and the promotion of private consumption. He also urged his ministers to ensure political stability leading up to the 2024 elections.
“The second half of the year will not be easy, and we must remain cautious of several factors, such as an unstable global environment and geopolitical tensions that may impact our economy and trade activities,” stated Jokowi.
The government aims to set a higher GDP target for 2024, with estimates exceeding 5.7%. Additionally, it seeks to reduce the poverty rate to 6.5%-7.5% from the current 9.57% as of September, with the complete eradication of extreme poverty targeted for the following year.
Indonesia’s successful resurgence to upper-middle income status serves as a testament to the resilience of its economy and the government’s commitment to driving sustainable growth.
