The Logistics Sector Has the Potential to Be A Forefront Of Economic Growth in 2024
This article has been translated and summarized by CORIM Indonesia as part of our highlights of services. We has not completely checked the accuracy and admits no responsibility for the content.
By InfoPublik.id
Press conference | January 17, 2024
The Indonesian economy is projected to continue growing in 2024, following the growth observed in 2023. However, the growth rate for these two years is anticipated to be lower than that of 2022, estimated at 5.31%. The government forecasts Indonesia's economic growth to reach 5.1 percent in 2023 and 5.2 percent in 2024, whereas the Bank of Indonesia predicts 4.7-5.5 percent growth in 2024.
Several international institutes have published similar projections. The World Bank anticipates Indonesia's GDP to grow by 4.9 percent in 2024, the IMF by 5.0 percent, and the Asian Development Bank (ADB) by 5.0 percent.
According to Setijadi, CEO of Supply Chain Indonesia (SCI), the logistics sector has the potential to be one of its forefronts of this slow economic growth. The rising contribution of the transportation and warehousing sector to the Gross Domestic Product (GDP) in recent years is one indicator. Based on BPS data for the third quarter of 2023, SCI projects that the transportation and warehousing sector would contribute IDR 1,245 trillion in 2023, up 14.99 percent, and IDR 1,436 trillion in 2024, up 14.16 percent.
Aside from significantly contributing to economic growth, the logistics industry has the ability to boost the growth of other sectors by increasing effectiveness and efficiency through technological advancement, process improvement, and human resource competency. This is possible through collaboration and synergy among logistics service providers as well as between logistics service providers and cargo owners.
"SCI advocates for the development of logistics service providers' business services from foundational to value-added services (third-party logistics provider), lead logistics, and even synchronized supply chains." Furthermore, national logistics service providers must evolve into world-class organizations with a global network," said Setijadi on Wednesday, January 3, 2024.
Processing, agriculture, trade, mining, and construction will be among the important industries in the logistics industry in 2024, according to SCI. The food and beverage industry has the most substantial logistic potential among non-oil and gas processing businesses, followed by the automobile industry, chemical and pharmaceutical industry, metal goods industry, and textile industry. Logistics service providers can play a role in improving the efficiency of handling logistics for these key industries, as well as potential commodities facing logistical challenges that require end-to-end supply chain development, to make a more substantial contribution to national economic growth in 2024.
"The role of central and regional governments is critical in the development of infrastructure and logistics facilities, particularly in the establishment of multimodal transportation systems." Furthermore, regulatory, and bureaucratic support, as well as fiscal and non-fiscal incentives, are required," Setijadi noted.