BI: North Kalimantan economy rose 4.66 percent in Q4 2024.

Bank Indonesia (BI) noted that the economic growth of North Kalimantan Province continued its positive trend in the fourth quarter (Q4) of 2024 at 4.66 percent year-on-year (yoy), higher than 4.29 percent yoy in the third quarter (Q3) of 2024.

"This growth is reflected in the positive performance of the majority of business sectors, especially construction, due to the acceleration of the development of National Strategic Projects (PSNs) and private projects," said BI North Kalimantan Province Representative Office Head Hasiando Ginsar Manik in Tarakan City, North Kalimantan on Feb. 7, 2025.

The construction sector grew 16.22 percent due to the development of the green sector-focused Kalimantan Industrial Park Indonesia (KIPI) in Bulungan Regency, the development of a paper factory in Tarakan City, and the development of housing areas in various regions of the province.

Hasiando revealed that the acceleration of KIPI's construction by the end of 2024 created employment for around 9,000 workers. In addition, the construction, accommodation, food, and beverage sector surged by 13.88 percent. It is followed by the trade sector which grew 8.94 percent. Meanwhile, the development of the trade business sector is supported by increased consumption amid campaign activities for the 2024 simultaneous regional elections.

From the expenditure side, the North Kalimantan economy was driven by investment components in line with the increasing development of strategic projects. The province's economic growth remained positive overall in 2024 by 4.57 percent yoy, but slowed down compared to 4.94 percent yoy in 2023.

The growth slowdown was influenced by the slowdown in North Kalimantan's main export, coal, and its less competitive price for coal exported to India compared to the price of South African coal. Ginsar explained that North Kalimantan's economic growth was held back from progressing higher in 2024 due to the province's continued dependence on the mining sector, especially coal, which is still showing a downward trend in prices compared to 2023.

However, North Kalimantan economic growth is expected to improve in 2025 to the 4.7-5.4 percent yoy range amid the widening divergence of world economic growth and the continuing uncertainty of the global financial market. The positive growth trend is mainly driven by continued investment in the KIPI area, which led to accelerated operational and production activities. But the weakened global coal demand amid low prices remains a risk to the province's economic performance.