Jakarta's Economy at 496 Years: A Current Assessment

Jakarta City turned 496 years old on Thursday, June 22, 2023. At almost half a millennium old, what is the condition of the Indonesian capital's economy?

Although Jakarta's economy suffered a setback due to the Covid-19 pandemic, it has shown continuous positive growth since the end of 2021.

This is evident from data from the Central Statistics Agency (BPS) which shows that the capital's economic growth reached 4.95% in Q1 2023 compared to Q1 2022 (year on year/yoy).

Jakarta's economic growth rate is almost approaching pre-pandemic levels, as shown in the graph above.

"Increased public activity after the lifting of the Community Activity Restrictions (PPKM) boosted Jakarta's economy during this period," said BPS in its report last month (5/5/2023).

Furthermore, according to BPS, the decline in energy commodity prices and the maintenance of domestic demand also supported Jakarta's economic growth.

The business sectors driving Jakarta's economy are transportation and warehousing, which grew by 17.43% (yoy). BPS stated that the increasing public mobility has impacted the growth of this sector.

The second highest growth sector is other services, which grew by 13.16% (yoy). According to BPS, the main increase occurred in entertainment and tourism activities.

"This is indicated by the large number of visitors to recreational places and entertainment events in Jakarta, such as music concerts at the beginning of 2023," said BPS.

High public activity also boosted the performance of accommodation and food and beverage providers, which grew by 8.27% (yoy) in Q1 2023.

Meanwhile, two business sectors experienced contraction. The largest contraction occurred in mining and quarrying, at minus 8.16% (yoy), followed by electricity and gas supply at minus 7.69% (yoy).

In Q1 2023, all expenditure components in DKI Jakarta grew positively. The Non-Profit Institutions Serving Households (PK-LNPRT) Consumption Expenditure component showed the highest growth at 7.95% (yoy).

The second largest growth component was Household Consumption Expenditure (PKRT), which grew by 4.18% (yoy), and Government Consumption Expenditure (PKP) increased by 1.79% (yoy).