Indef Highlights Negative Growth In Government Consumption In Quarter II/2022

JAKARTA - The Institute for Development of Economics and Finance (Indef) highlighted that suboptimal government spending boosted Indonesia's economic growth.

As is known, the Indonesian economy in the second quarter of 2022 grew positively by 5.44 percent.

Meanwhile, government consumption is negative -5.24 percent on an annual basis.

Deputy Director of Indef, Eko Listiyanto said the government's consumption performance was in the red zone, where for two consecutive quarters it grew negative.

“Two consecutive quarters, consumption spending has always shown negative growth. In the second quarter of 2022, government consumption expenditure grew by -5.24 percent yoy, continuing its red report card in the first quarter of 2022 which also grew negatively by -7.59 percent yoy," he said in a virtual discussion, Sunday, August 7.

Eko said that the non-optimal performance of the state budget spending stimulation to boost the economy is certainly very unfortunate, considering that government consumption is one of the important accelerators in spurring economic recovery from the pandemic.

"The problem is, it is precisely on the side of government spending that the acceleration does not occur," he explained.

Eko said, the reason is that state spending until the end of June 2022 reached Rp1,156.88 trillion or 37.24 percent of the 2022 APBN Ceiling or decreased by 1.13 percent (yoy) compared to the same period the previous year.

“If we look more closely, the realization of Central Government Expenditures also experienced a decline in growth of 0.82 percent (yoy). This is due to the realization of goods expenditures and capital expenditures which are still contracting by 20.75 percent and 19.84 percent (yoy),” he said.