JakartaPost-Nov 23
Indonesia has become one of the Group of 20 countries – the world’s twenty largest economies – that is resilient against this year’s multiple economic downturn cycles. It has managed to overcome the impact of the Omicron variant, Russia’s invasion of Ukraine that triggered a global food security problem and energy crisis, and persistent high global inflation leading to interest rate hikes and financial turmoil (flight-to-quality). In fact, Indonesia’s economic performance is regarded among the best in G20 economies and other countries. Through economic turbulence, Indonesia’s economy evinces solid momentum as the gross domestic product expanded by 5.40 percent year-on-year (yoy) in the first nine months of 2022, with an increasing pace in every quarter. This achievement needs to be greatly appreciated since the economy could still be able to grow at a faster rate against the background of the escalating fear of a global recession. How could Indonesia be resilient despite facing uneasy global challenges? Both domestic and external factors play a big role in Indonesia’s impressive economic growth. In short, vigorous COVID-19 management, including a high vaccination rate, has paved the way for the easing of mobility restrictions and thus a stronger domestic demand, which contributes to more than half of the gross domestic product. Moreover, high global commodity prices have encouraged export, which consequently ensures a long series of trade surplus and external sector resilience and provided a windfall to state revenues, enabling the government to restrain the inflationary pressure impact from fuel and energy price adjustment (fiscal as a shock absorber). Inflation was recorded at a relatively manageable rate of 5.71 percent yoy in October 2022, notably lower compared to other large economies of which some of them suffered from a double-digit inflation rate. This allows the monetary authority, Bank Indonesia (BI), not to aggressively raise the benchmark rate in favor of stability, which could discourage business and investment activities. Read more at: https://www.thejakartapost.com/paper/2022/11/23/securing-growth-momentum-in-2023.html.
