Indonesia Central Bank Forcasts Economy May Grow 5.2 Percent This Year

JAKARTA, KOMPAS.com - Indonesia's Central Bank (BI) Governor Perry Warjiyo said that the national economic growth would reach 5.2 percent in 2022, supported by exports and domestic consumption that ought to be maintained.

Meanwhile, in 2023, he estimated that economic growth could reach 4.6 to 5.3 percent or higher than the global growth of 2.6 percent.

“Hence, our economic growth is higher than (that of) the world, even higher than other developing countries. Of course, we must encourage exports, carry out downstreaming, and strengthen the people's economy," Warjiyo said at the webinar "National Economic Recovery" held by the Indonesian House of Representatives in Jakarta on Wednesday, Oct. 19.

This year's economic growth is estimated to reach 5.2 percent, as Indonesia has managed to maintain the purchasing power of the people, who contribute over 50 percent of the gross domestic product (GDP) by controlling inflation, among others.

In September, the annual inflation reached 5.9 percent or lower than BI's forecast of 6.2 percent on an annual basis.

Also read: Renewable Energy Transition Requires $3.5 Trillion in Investment Per Year: Bank Indonesia

"This is due to strong coordination to overcome the impact of the propagation of the increase in commodities and fuel oil (BBM) prices. Coordination is carried out through the Central and Regional Inflation Control Teams, the national movement to control food prices, and the provision of fiscal incentives," he said.

BI will also maintain the rupiah exchange rate that has depreciated by seven percent throughout 2022, so that the increase in global food and energy prices does not affect domestic food and energy prices.

Credit growth will also continue to be encouraged through coordination with the Financial Service Authority (OJK), so that it can grow to 11 percent annually in 2022 and continue to grow at 10 percent in 2023.

"Bank Indonesia also encourages lending to priority sectors, including micro, small and medium enterprises (MSMEs)," he said.