Indonesia's Economy Has Grown Above 8% Several Times: Here Are the Drivers

President Prabowo Subianto has set a target for Indonesia's economic growth to reach 8% by 2029.

This target is recorded in the National Medium-Term Development Plan (RPJMN) 2025-2029, established through Presidential Regulation (Perpres) Number 12 of 2025.

Previously, during the period 1961-2024, Indonesia's economy grew above 8% five times, namely:

* 1968: economic growth of 10.92%
* 1973: economic growth of 8.1%
* 1977: economic growth of 8.76%
* 1980: economic growth of 9.88%
* 1995: economic growth of 8.22%

According to the government's presentation in the RPJMN document, this high growth was influenced by various factors.

In 1968, Indonesia's economic growth surged thanks to openness to foreign investors, simplification of foreign trade procedures, and inflation control.

Then, in 1973 and 1977, Indonesia's economic growth was supported by a surge in world oil prices. Indonesia, which at that time was still an oil exporter, benefited from this moment.

In 1980, Indonesia's economy grew strongly driven by export diversification, with timber as the main commodity.

In 1980, Indonesia also implemented deregulation in banking, finance, and trade to facilitate foreign investment, coupled with a food self-sufficiency program.

Meanwhile, in 1995, Indonesia's economy grew strongly due to the strengthening of the manufacturing, automotive, and service industries, as well as the increase in foreign direct investment.

To achieve the 8% economic growth target in 2029, the Prabowo Subianto administration has established 8 main strategies outlined in the RPJMN 2025-2029, namely:

1. Increasing agricultural productivity towards food self-sufficiency;
2. Industrialization/downstreaming of labor-intensive export-oriented and sustainable sectors;
3. Tourism and creative economy;
4. Blue economy and green economy;
5. Cities as centers of economic growth;
6. Digital transformation;
7. Export-oriented Foreign Direct Investment (FDI) and non-state budget investment;
8. State spending for productivity through free nutritious food programs, the construction of 3 million houses, and others.