Bank Mandiri Projects Indonesia's Economy To Grow At Around 5.17 Percent This Year

JAKARTA - PT Bank Mandiri Tbk projects Indonesia's economic growth rate to be in the range of 5.17 percent this year. This begins with the projected achievement of 4.95 percent of the rate of increase in gross domestic product (GDP) in the first quarter of 2022.

Bank Mandiri Chief Economist Andry Asmoro said that there are several important factors that influence the acceleration of Indonesia's economic growth going forward. The improvement in commodity prices that has taken place since the end of 2020 is one of the important factors influencing the acceleration of economic growth.

"The increase in the price of crude palm oil (CPO), coal and nickel will increase spending transactions and lead to economic improvement in the region," Andry said in a written statement, quoted on Monday 9 May.

Andry further explained that the increase in coal prices will increase sales of commercial cars, while the increase in CPO prices will encourage sales of passenger cars. Not only that, other derivative sectors are also predicted to improve, in line with commodity price stability.

It is certain that regional economic recovery will be more massive if people's mobility is relaxed and COVID-19 cases can be suppressed, or there are no new deadly variants.

"That way, development that triggers improvements in the quality of infrastructure in the regions is able to support sustainable economic growth," said Andry.

Based on data from the Committee for the Acceleration of Priority Infrastructure Provision (KPPIP), there are 201 projects and 10 programs in the Latest National Strategic Projects. These strategic projects are not only located on the island of Java, but are spread outside the island of Java.

Andry said the increasingly massive level of infrastructure development, such as toll roads, ports and airports, would have an impact on the ease of mobility between regions, both for the mobility of people and goods.

Then, referring to the calculations of the Bank Mandiri Research Team, Andry said that transactions during the month of Ramadan and Eid will encourage an increase in National GDP by 0.14 ppt. The improvement, he said, would be evenly distributed to all regions.

Not only that, the trend of community mobility also helps improve the economy in tourist destinations. This is reflected in the economy in the provinces of Bali and Nusa Tenggara which has started to improve since the second semester of 2021. Other supporting factors are also supported by government policies to encourage more equitable investment outside Java.