Jokowi Targets Indonesia's Maximum Economic Growth Of 5.5 Percent In 2022

JAKARTA - President Joko Widodo (Jokowi) targets Indonesia's economic growth in 2022 in the range of 5 to 5.5 percent. These assumptions are based on structural reform policies and take into account the dynamics of the COVID-19 pandemic in Indonesia. The target is also higher when compared to economic growth in the 2021 State Budget, which is 5 percent.

"The assumption of macroeconomic indicators that we will use in 2022 is as follows. Economic growth in 2022 is estimated to be in the range of 5.0 percent to 5.5 percent", he said in his introductory speech to the Bill on the State Budget for Fiscal Year 2022 along with a Financial Note, Monday, August 16.

Jokowi said that the government would make every effort to achieve the growth target at the upper limit of 5.5 percent. However, Jokowi admitted that he was still wary of the development of COVID-19, which was still very dynamic. In addition, he said that global and domestic uncertainties could contribute to risks for future economic growth.

Therefore, Jokowi said, the government will use all resources, scientific analysis, and expert views to continue to control the pandemic, so that economic recovery and social welfare can be maintained and accelerated.

The former governor of DKI Jakarta said that this economic growth rate also illustrates the projection of a fairly strong recovery. However, it must be supported by investment and export growth as a result of implementing structural reforms.

However, he said, vigilance is still needed given that global and domestic uncertainties can contribute to risks for future economic growth.

In addition, Jokowi also revealed several other macro assumptions, including inflation, the rupiah exchange rate, and oil lifting. For inflation, the government targets to maintain it at a level of 3 percent. This is similar to the target in the 2021 State Budget.

"Inflation will be maintained at the level of 3 percent. Describing the increase in demand, both due to economic recovery and improvement in people's purchasing power", he explained.

Furthermore, the rupiah exchange rate is estimated to move in the range of IDR 14.350 per US dollar. This target is stronger than the position in the 2021 State Budget, which is IDR 14.600 per US dollar. Meanwhile, the 10-year Government Securities (SUN) interest rate is estimated to be around 6.82 percent per year, or an improvement compared to the target in the 2021 State Budget, which is 7.29 percent per year.

"This reflects Indonesia's economic fundamentals and the influence of global dynamics", he said.

Then, the price of Indonesian crude oil (ICP) is estimated to be around USD 63 per barrel. This target also increases compared to the benchmark in the 2021 State Budget, which is 45 US dollars per barrel. Meanwhile, oil and gas lifting is estimated to reach 703.000 barrels and 1.036.000 barrels of oil equivalent per day, respectively.