Sri Mulyani: Economic Growth In The First Quarter Exceeds Target

Minister of Finance Sri Mulyani (Photo: Capture Youtube UOB screen)

JAKARTA The government said that the Indonesian economy is again showing resilience amid the dynamics of the global economy which continues to slow down.

This is reflected in national economic growth which continued a strengthening trend in the first quarter of 2023 of 5.03 percent year on year (yoy). This figure is claimed to surpass most of market analysts' predictions even above China, which grew 4.5 percent in the same quarter.

Minister of Finance (Menkeu) Sri Mulyani said the strong economic growth was supported by public consumption activities. Household consumption grew by 4.5 percent, strengthened compared to growth in the first quarter of 2022 (4.3) percent and grew positively 0.2 percent quarter to quarter. (qtq)

"This reflects the maintained strengthening of people's purchasing power supported by price stability in the country and increasing public income in line with the sustainability of job creation. In this case, the APBN plays an important role, both as a shock absorber in reducing global inflationary pressures and in encouraging strengthening economic activity," he said in an official statement quoted on Sunday, May 7.

According to the Minister of Finance, Government consumption has again grown positively by 4.0 percent (yoy), encouraging the activities of the private sector. Acceleration of absorption of state budget spending, especially School Operational Assistance (BOS), encourages the growth of government consumption in this quarter. State budget expenditure components that are included in government consumption, such as goods spending grew high by 36.4 percent and employee spending grew 1.2 percent.

In addition, state spending continues to be optimized to support the sustainability of economic recovery and maintain people's purchasing power through social assistance programs. This also shows that fiscal consolidation carried out by the government in 2023 does not hold back the pace of accelerating national economic growth.

The Minister of Finance added that in terms of production, the leading sectors continued to grow positively, including the primary sector. The mining sector still grew strongly by 4.9 percent amid the moderation of global commodity prices.

The manufacturing and trade sectors are the main contributors in terms of production. The manufacturing sector grew by 4.4 percent yoy supported by strong domestic demand ahead of the month of Ramadan and high demand for downstream commodities such as CPO and mineral processing.

The Minister of Finance added that the performance of economic growth this year is estimated to be still quite promising amid the slowdown in the global economy. The resilience of economic growth levels until the first quarter is a strong indication that the resilience of the national economy in dealing with global pressures continues to improve.

The 2023 APBN has been designed conservatively and anticipatoryly for the global economic slowdown, including the impact of the ban on commodity price moderation. On the other hand, fiscal policy is also directed to accelerate the implementation of the structural reform agenda, particularly through strengthening the quality of human resources, accelerating infrastructure development, and improving institutional and regulatory quality," closed the Minister of Finance Sri Mulyani.