Activities in IKN Boost East Kalimantan's Economic Growth by 5.85 Percent

Penajam Paser Utara, VIVA – Construction activities in the new capital city, IKN, have significantly boosted the economic performance of East Kalimantan Province, resulting in a 5.85 percent year-on-year (yoy) growth.

The Head of the East Kalimantan Statistics Agency (BPS), Yusniar Juliana, stated that the physical progress of IKN's development has accelerated.

"As of June, the physical completion of IKN's batch-1 development, which includes supporting facilities and several office buildings, has reached 88 percent," Juliana said in Samarinda on Tuesday (August 6).

For batch-2, which consists of housing for Civil Servants (ASN), Indonesian national army (TNI), and Indonesian National Police (Polri), the progress has reached 46.71 percent. Meanwhile, the progress for batch-3 development, which includes green space arrangements and national axis completeness, has reached 8.61 percent.

Another factor contributing to East Kalimantan's economic growth is the high global demand for coal, driven by several factors, such as a 1.7 percent decrease in China's domestic coal production in the first half of 2024.

The decline was due to the implementation of top safety regulations from March to May, leading to a 12.6 percent increase in China's coal imports in the first half, some of which were imported from East Kalimantan, given China's high energy needs.

Juliana explained that East Kalimantan's 5.85 percent yoy economic growth, viewed from the production side, saw the highest growth in the fields of government administration, defense, and compulsory social security, reaching 25.5 percent.

"From the expenditure side, the highest growth component was government consumption expenditure (PK-Pemerintah), which grew by 26.18 percent," Juliana remarked.

East Kalimantan's economy in the second quarter of 2024 grew by 1.67 percent compared to the previous quarter. From the production side, the highest growth was in government administration, defense, and compulsory social security, which grew by 24.09 percent, while from the expenditure side, the highest growth component was PK-Pemerintah, which grew by 88.37 percent.

The positive economic growth in the second quarter of 2024 was observed in all provinces in Kalimantan. East Kalimantan contributed the highest to the regional value-added composition of Kalimantan, accounting for 47.77 percent.

"The economy of East Kalimantan in the second quarter of 2024, based on Gross Regional Domestic Product (GRDP) at current prices, reached IDR 214.64 trillion, while the GRDP at constant prices reached IDR 141.34 trillion," she said.

She also mentioned that, cumulatively, East Kalimantan's economy in the first half of 2024 compared to the first half of 2023 grew by 6.54 percent (c-to-c).