Indef Predicts Indonesia's Economy To Grow In The Range Of 5 Percent Throughout 2022

Illustration. (Photo: Doc. Antara)

JAKARTA - Deputy Director of the Institute for Development of Economics and Finance (Indef) Eko Listiyanto said economic growth in the first quarter of 2022 which reached 5.01 percent year on year could be the capital to achieve an average economic growth of 5 percent year on year throughout 2022.

"I think this 5 percent growth can be used as capital to pursue an average growth target of 5 percent or 5.2 percent year on year in 2022," Eko said as quoted by Antara, Monday 9 May.

He said this growth was supported by the processing industry, which in the first quarter of 2022 grew higher than economic growth or reached 5.07 percent year on year.

"I think the manufacturing industry will be the main driving sector in the 2022 economy," he said.

Meanwhile, the education services sector is also expected to grow starting in the second quarter of 2022 in line with the increasingly massive face-to-face school implementation.

On the other hand, the health service sector needs to start transforming to be able to maintain growth after the COVID-19 pandemic turns into an endemic.

"What may have to be prepared is health services because there may be no more PCR and antigen tests, so they have to transform themselves to produce sustainable growth after there is no windfall due to the pandemic," he said.

He added that in the future the government needs to keep the prices of basic needs of the community, especially energy prices such as fuel oil, gas and electricity, so as not to rise too high.

"If it can be restrained, it is possible that the growth in the second quarter of 2022 could be better than the first quarter because the momentum of Eid to improve the economy is much higher than at the beginning of the year when there was no stimulus other than government policies," he said.

Inflation which reached 3.47 percent year on year in April 2022 must also be watched out for because it can hamper bank lending.

Eko explained that if inflation continues to rise, banks have the potential to increase interest rates to maintain liquidity so that business actors are reluctant to take credit.

"If credit growth is very slow or only 5 to 6 percent, it will not be enough to make economic growth in 2022 reach above 5 percent year on year," said Eko.