The Objective Of Achieving An Economic Growth Rate Of 8 Percent Necessitates A Corresponding Increase Of 60 Percent In The Income Of The Populace

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The Objective Of Achieving An Economic Growth Rate Of 8 Percent Necessitates A Corresponding Increase Of 60 Percent In The Income Of The Populace

Tuesday, 28 Jan 2025

The Indonesian government has set an ambitious target of 8 percent economic growth to accelerate the nation's progress. However, Siddhi Widayaprathama, the Chairman of the Taxation Committee of the Indonesian Employers Association (Apindo), has cautioned that achieving this target requires a significant leap, including a 60 percent increase in public income. "It may seem like a mere increase of 3 percent from 5 percent to 8 percent, but that 3 percent actually represents about a 60 percent rise. This means that all sectors must grow by approximately 60 percent," Siddhi stated during the Economic and Taxation Outlook 2025 event on Thursday, January 23, 2025.

He emphasized that this 60 percent increase is not merely a numerical goal but reflects the scale of transformation necessary. "This implies that the income of everyone present here must rise by 60 percent. Expenditures must also increase by 60 percent, and so forth. While this is indeed an oversimplification, it serves as an illustration of what is needed to achieve 8 percent growth," he remarked. Previously, Coordinating Minister for Economic Affairs Airlangga Hartarto revealed that the 8 percent economic growth target is aimed at accelerating job creation across various sectors. "The 8 percent target is designed to stimulate all sectors and develop those that can drive greater job creation," Airlangga stated recently.

Airlangga further noted that the government's focus is on achieving self-sufficiency in food and energy, which are expected to be the main drivers of Indonesia's economic growth. "The sectors prioritized by the President are food and energy self-sufficiency. From these two areas, we hope to leverage better economic growth," he explained. Additionally, efforts to improve the Incremental Capital Output Ratio (ICOR) will be prioritized to enhance economic growth by 1 to 2 percent. "Thus, if we can lower our ICOR, it could also contribute to an increase of 1 to 2 percent in economic growth," Airlangga added.