Is Prabowo’s growth target for Indonesia realistic? ‘Delusional’ plan could be costly for economy, analysts say

Presumptive president-elect Prabowo Subianto projects 8 per cent growth for Indonesia in the next five years, at a time when the country is facing economic headwinds

Economists say a new finance minister must put the brakes on Prabowo’s proposed, costly policies, which are ‘unrealistic’ if not supported by fundamental reforms

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A food vendor waits for customers at a market in Depok on Wednesday. Indonesia is facing economic headwinds including high food inflation, a depreciating currency and declining commodities prices. Photo: EPA-EFE

Published: 12:00pm, 10 Mar 2024

Presumptive president-elect Prabowo Subianto’s plan to accelerate Indonesia’s economic growth to 8 per cent in the next five years is “delusional”, economists have said, particularly as some of his proposed policies could work counter to that target.

Prabowo, the current defence minister, unveiled his plan at a time when Indonesia is facing economic headwinds including high food inflation, a depreciating currency and declining commodities prices.

“My estimate is that in the next four to five years, we can achieve [economic] growth rates of up to 8 per cent or even greater,” he said on Tuesday, in his first public address since the February 14 election. According to unofficial quick count results that have yet to be confirmed, Prabowo won nearly 60 per cent of votes in the election.

Indonesian defence minister and presumptive president-elect Prabowo Subianto greets supporters in Jakarta on February 15. Photo: AP

In his wide-ranging speech, the former general highlighted an ambitious plan to raise the tax-to-GDP ratio from 10 to 16 per cent and become a food exporting nation in the next four years.

His 8 per cent growth target is higher than the World Bank’s January forecast, which predicted Southeast Asia’s biggest economy was likely to grow only 4.9 per cent this year and next.

Other economists and financial experts are not as bullish as Prabowo, either.

Bhima Yudhistira, director at the Jakarta-based Centre of Economic and Law Studies (Celios), called Prabowo’s 8 per cent growth forecast a “delusional and unfounded” target that was reminiscent of outgoing President Joko Widodo’s promise of a 7 per cent annual growth rate during his first presidential campaign a decade ago.

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