Infrastructure development plays role as Indonesia's foundation of economy

Indonesia’s economy has retained its stability over the past decade despite numerous challenges, Minister of Finance Sri Mulyani Indrawati said at the BNI Investment Conference 2024 in Jakarta on Tuesday.

The annual conference, hosted by Bank Negara Indonesia (BNI), focused on strategies to tackle national and global economic issues.

Indrawati emphasized that Indonesia successfully strengthened its fiscal position post-Covid-19 by keeping the national budget deficit below 3% of GDP. The country's steady economic growth is largely attributed to the government's focus on infrastructure development and human capital investment.

Infrastructure development has been a key pillar of Indonesia’s economy, paving the way for quality growth. Under President Joko Widodo’s administration, infrastructure spending has significantly increased, from 157.4 trillion IDR (about $10 billion) in 2014 to 423.4 trillion IDR in 2024, the final year of his presidency.

In addition, Indonesia has prioritized human development, with substantial budget allocations for education, social welfare, and healthcare. Education funding has nearly doubled over the past decade, from 353.4 trillion IDR ($22.5 billion) in 2014 to 665.02 trillion IDR this year.

Social welfare spending has been redirected towards programmes that provide food aid, and healthcare spending has improved access to services through the National Health Insurance programme, which now supports 96.6 million people.

The minister emphasised that these foundations have been built without compromising the state budget over the last decade.