Indonesia is entering 2023 with relatively full self-confidence, in spite of the recession and uncertainty haunting the global economy. This optimism is based on the economic resilience and performance in 2022.
By
KOMPAS EDITOR
·3 minutes read
KOMPAS/RADITYA HELABUMI
Hundreds of job seekers at the Indonesia Career Expo which took place at the Smesco Building, Jakarta, Friday (27/1/2023). The job fair which lasted for two days was attended by dozens of companies and is free for the public.
Speakers at a discussion on the occasion of the 6th anniversary of kompas.id showed optimism on the campus of Multimedia Nusantara University, Tangerang, Banten, on Monday (6/3/2023).
Domestic consumption and export growth played an important role. The impressive 2022 performance was linked to the commodity price hikes and the strategic mining material downstream processing policy launched by President Joko “Jokowi” Widodo as well as the role of the State Budget as a shock absorber.
Nevertheless, the meeting was warned of the need for prudence, in view of the uncertain geopolitical and global economic conditions, such as the possibility of Russia-Ukraine war escalation, United States-China trade war, a climate crisis and an aggressive interest rate increase by the US Federal Reserves (Fed) predicted to continue as US inflation is still far from the target of 2 percent.
This year, Indonesia may not be able to expect windfall profits like last year because commodity prices on the world market are beginning to flatten. Therefore, they warned of the importance of boosting investments, consumption and new sources of nontax receipts to maintain the rate of growth.
Apart from the positive developments of various macroeconomic indicators at home, the global situation itself offers some hope. Several recent developments give a signal the global situation may not be as grave as feared. Even if a recession occurs, it will not be as profound as earlier predicted. World economic recovery is also expected to accelerate faster than previously estimated.
ADRYAN YOGA PARAMADWYA
Participants listened to the High Level Seminar "ASEAN Matters: Epicentrum of Growth" at the Bank Indonesia Office, Jakarta, Monday (6/3/2023). Indonesia invites Southeast Asian countries to be optimistic about becoming the center of world economic growth.
Even in January 2023, the International Monetary Fund revised its projection of world economic growth upward from 2.7 to 2.9 percent. With the improved projection, economic growth of more than 5 percent in 2023 is not difficult to achieve in Indonesia. The economic activity upon entering the political year is also predicted to set the economy in motion.
Indonesia’s 5.31 percent growth in 2022 was the highest since 2013. With such a high growth rate, we were already back to the pre-pandemic level of growth.
Globally, the upheavals are also subsiding. Various commodity prices are steady, in line with the expectation of world economic slowdown. Inflation in major economies is getting under control so the pressure to raise the interest rate is also decreasing. Economic slowdown in fact takes place in several countries, but their rates are only moderate, while for other countries and zones they are relatively stable.
The end of the zero-COVID policy in China and the reopening of the two largest economies in the world also raise global economic optimism. In the face of an as-yet-uncertain global situation, monetary-fiscal policy coordination in the control of inflation becomes the main key to preserving the purchasing power of society and domestic consumption.
A blend of macro-micro-monetary policies that are well-targeted, well-timed and accommodating; a strong fiscal role as a shock absorber; and the government’s commitment to continue the structural reform and economic transformation agenda are also important in maintaining the momentum of economic growth.
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