National political situation and economic growth are interrelated. As Indonesia gears up for presidential and legislative elections in February 2024, the country’s economy is projected to follow a higher growth path, supported by growing consumption as election dates are approaching.

DBS Group Research data revealed that Indonesia grew significantly in 2022 and is projected to grow by around 5% in 2023 as key growth drivers return to pre-pandemic levels. DBS Asian Insights Forum 2023, entitled 'Indonesia's Pivotal Role to ASEAN Economy', presented expert insights on how political events have become one of the factors that support the growth of various sectors in post-pandemic Indonesia. The event was attended by Coordinating Minister for Maritime and Investment Affairs of the Republic of Indonesia Luhut Binsar Pandjaitan, Coordinating Minister for Economic Affairs of the Republic of IndonesiaAirlangga Hartarto, Economist and Former Minister of Finance of the Republic of Indonesia Chatib Basri, Executive Director of Indonesian Political IndicatorsBurhanuddin Muhtadi, and Managing Director and Chief Economist at DBS BankTaimur Baig.

As economic growth in the majority of the global economic powerhouses is slowing, Indonesia is one of the countries projected to enjoy the highest economic growth. DBS Group Managing Director & Chief EconomistTaimur Baigsaid, "What sets Indonesia apart from other countries is that its economy is not necessarily dependent on global trade. Despite potential global volatility, Indonesia has substantial economic resilience due to macroeconomic and financial resilience."

A survey conducted by Indikator Politik Indonesia revealed that there are currently 34 presidential candidates for the upcoming 2024 presidential election. Ganjar Pranowo (Central Java governor), Anies Baswedan (Jakarta governor), and Prabowo Subianto (Minister of Defence) have been the talk of town over the past year as candidates. All three candidates have very strong support bases, securing 75% of the total support of the Indonesian citizens in the past year.

On the same occasion, Executive Director of Indikator Politik IndonesiaBurhanuddin Muhtadiexpressed optimism that the results of the presidential and legislative elections, as well as the policy agenda of each party, would not greatly affect the national economic policy. Additionally, Indonesia's political stability is well maintained with nearly zero political violence compared to the previous elections.

"Looking back on the past five elections since the beginning of the reform era, the majority of Indonesians also believe that the government can maintain national security and stability. Additionally, the country’s elite strongly believe that Indonesian politics is very fluid, so democracy is considered the only sure way for Indonesia. It should be appreciated that the elite still follow the rules of democracy despite losing the elections. This is what makes the political elites in neighboring countries envious of the stable domestic political environment," saidBurhanuddin Muhtadi.

The Asian Insights Forum presents the views of economic and political practitioners and observers to provide accurate information and in-depth discussions. These insights can be used by customers, partners and the public in making decisions. For more information on DBS Research, please visitwww.dbs.com

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Gauging Indonesia’s political situation ahead of 2024 elections