Even though Indonesia's exports continue to grow and the trade balance has had a surplus for the last 30 months in a row, the impact of the world economic slowdown must be anticipated more seriously.
By
KOMPAS EDITOR
·3 minutes read
TOTOK WIJAYANTO
Heavy equipment is used to assemble containers in the Tanjung Priok Port area, Jakarta, Wednesday (2/3/2022). The Statistics Indonesia (BPS) noted that Indonesia's economy in the third quarter of 2022 grew 5.72 percent.
The impact of the deterioration of the global economy in Indonesia is not only seen from slowing export growth and falling imports of raw materials and capital goods as a component of industrial production, but also from the start of layoffs (PHK) in certain sectors.
Layoffs occurred, among others, in the garment and footwear industries as a result of declining global demand and the economic slowdown in developed countries. Layoffs have also occurred in a number of startups as part of a global phenomenon.
With one of the highest-economic growths in the world at the moment, the International Monetary Fund (IMF) called Indonesia a bright spot amid the bleak prospects for the global economy. The Statistics Indonesia (BPS) noted that Indonesia's economy in the third quarter of 2022 grew 5.72 percent (yoy), following growth of 5.01 and 5.44 percent in the first and second quarters.
This growth increase shows that Indonesia is actually far from a recession. However, sooner or later, we cannot avoid the impact of the global recession, which is certain to occur in 2023. From the trade side, the trade balance is still a surplus of US$5.67 billion in October 2022 and $45.52 billion in January-October 2022.
TANGKAPAN LAYAR KANAL YOUTUBE SEKRETARIAT PRESIDEN
President Joko Widodo with leaders of the G20 countries when visiting the Grand Forest Park in Bali, Wednesday (16/11/2022). Indonesia invites the G20 countries to collaborate and work together in a concrete action for green development and an inclusive green economy.
Against the G20, which accounts for 80 percent of global trade, Indonesia is also still in surplus, with an enlarged surplus from $16.4 billion (2021) to $27.6 billion (January-October 2022), even though it recorded a deficit against 10 of the member countries. However, growth -- especially non-oil and gas exports -- continued to slow down in the last two months, in line with falling demand and falling commodity prices.
We anticipate that this situation will continue, with a global recession predicted to occur in 2023. The World Trade Organization (WTO) predicted a sharp decline in global trade growth in 2023. Following a predicted growth of 3.5 percent in 2022, global trade in 2023 is predicted to only grow 1 percent, far below the original projection of 3.4 percent.
Geopolitical factors, especially the Russia-Ukraine war, and global inflation have caused trade in goods and services, which in 2021 had recovered to pre-pandemic levels, to be threatened again.
We appreciate the various steps taken by the government to suppress the impact of the global economy on the domestic industry, including by boosting domestic demand and campaigning for the use of local products.
The World Bank and IMF predicted that at least 31 countries will experience a recession in 2023. Some of them are Indonesia's main trading partners. The crisis will also force a number of countries to ask for bailouts from the IMF. We must all be prepared to face difficult conditions in 2023. Here is the relevance of the G20 Summit in Bali. Through better global policy cooperation and coordination, it is hoped that the recession will not last long, and the global economy can recover faster and stronger in 2023.
