Indonesia Rises Again to Upper Middle Class, Recovering From the Pandemic

The World Bank released news on July 1, 2023 that Indonesia was again included in the Upper Middle-Income Country (UMIC) group amid various global pressures and uncertainties. According to the World Bank, Indonesia’s Gross National Income (GNI) per capita has increased by 9.8% to USD 4,580 in 2022. 

Even though Indonesia still has a long way to go to reach the level of a high-income country, aka a developed country, this achievement is enough to make us optimistic to become a developed country. 

In 2019, Indonesia was included in the upper middle-income country group with a GNI per capita of USD 4,070. However, the COVID-19 pandemic which halted almost all world economic activity, reduced Indonesia’s position to the Lower Middle Income Country (LMIC) group in 2020.

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According to data from the Central Statistics Agency (BPS), Indonesia’s economy in 2022 is calculated based on Gross Domestic Product (GDP) at current prices reaching IDR 19,588.4 trillion and GDP per capita reaching IDR 71 million or USD 4,783.9.

Looking at World Bank data, currently the Indonesian economy in 2022 is calculated based on Gross Domestic Product (GDP) at current prices reaching IDR 19,588.4 trillion and GDP per capita reaching IDR 71.82 million or USD 4,788. There are slight differences between BPS and the World Bank. But still the same, Indonesia is included in the upper middle income country.

The World Bank explained that the change in Indonesia’s category was due to Indonesia’s strong economic growth of 5.31%. (year-on-year/yoy). in the last year. The domestic economy in 2022 managed to grow thanks to high growth in the fourth quarter of 2022 which rose 5.01%.

Various State Budget instruments through the 2020-2022 PC-PEN program play an important role in providing policy bearings during the pandemic crisis and accelerating national economic recovery. 

On the other hand, the significant impact of natural resource downstream policies has boosted export performance and strengthened Indonesia’s external balance. Indonesia is one of the few countries in the world that has been able to recover fast and strong.

To realize Indonesia’s big dream of becoming a high-income country before 2045, consistently high economic growth is needed in the range of 6% – 7%. In the medium-long term, the Government will continue to direct structural reforms in order to support and accelerate economic transformation to build sectors that are high added value, inclusive and environmentally friendly.

To ensure the success of various structural transformation efforts, Indonesia needs qualified human resources, adequate infrastructure, as well as a regulatory and bureaucratic system that provides more certainty and convenience for investment activities and the business world.

Source: (press release), 

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