DIGIVESTASI - Indonesia's economic condition is considered unstable towards the end of President Joko Widodo's (Jokowi) administration, indicated by various weakening indicators. A number of data, such as the decline in economic growth (GDP), contraction in manufacturing PMI, deflation for five consecutive months, and a surge in layoffs, signal that the Indonesian economy is under pressure.

The following is a summary of data that illustrates Indonesia's declining economic conditions:

1. Lower GDP Growth
In the second quarter of 2024, Indonesia's economic growth was recorded at 5.05% on an annualized basis (year-on-year/yoy), lower than the first quarter of 2024 which reached 5.11%. This decline is considered normal given the seasonal pattern where the second quarter is usually stronger than the first quarter. However, Finance Minister Sri Mulyani Indrawati is optimistic that in the third quarter of 2024, economic growth will stabilize at 5.06%.

2. Manufacturing PMI Continues to Contract
Indonesia's Manufacturing Purchasing Managers' Index (PMI) stood at 49.2 in September 2024, signaling a contraction for the third consecutive month after July (49.3) and August (48.9). According to S&P Global, the decline was caused by sluggish global demand, which resulted in a decline in export orders for the seventh consecutive month. Although input costs increased due to exchange rate factors, some companies started to increase their workforce due to optimism for the recovery ahead.

3. Five Consecutive Months of Deflation  
Indonesia recorded five consecutive months of monthly (month-to-month/mtm) deflation from May to September 2024. The Central Bureau of Statistics (BPS) reported deflation of 0.12% in September 2024, deeper than the previous month (0.03%). This condition is reminiscent of the 1998/1999 crisis. The prolonged decline in food prices and indications of weakening purchasing power are considered the main causes of this protracted deflation.

4. Uncontrolled Surge in Layoffs  
The weakening of people's purchasing power is affected by the increasing number of layoffs. The Ministry of Manpower noted that by September 2024, 52,993 workers in Indonesia had been laid off, up 25.3% compared to the same period in 2023. The manufacturing sector, including the textile, garment, and footwear industries, was the most affected by this wave of layoffs.

5. State Revenue Drops
The Ministry of Finance reported that state revenue as of August 2024 reached Rp1,777 trillion, or 63.4% of the 2024 State Budget target, down 2.5% compared to the previous year. Tax revenues, particularly from non-oil and gas income tax, declined due to weaker commodity prices and lower oil lifting. Oil and gas income tax also fell by 10.23% on an annualized basis.

This data shows that the economic challenges facing Indonesia today are quite complex, involving domestic and global factors that have the potential to affect purchasing power and economic stability in the future.

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