Economic Growth Above 5 Percent, Observer: Subsidies For Fuel And LPG, And Lebaran THR Make Big Contributions

Illustration. (Photo: Doc. Antara)

JAKARTA - The Central Statistics Agency (BPS) reported that Indonesia's economic growth rate in the second quarter of 2022 on an annual basis (year on year / yoy) was 5.44 percent.

In response to this, the Director of the Center of Economic and Law Studies (CELIOS) Bhima Yudhistira stated that the government's efforts to provide subsidies, especially for energy, have contributed greatly to achieving the realization of economic growth in the second quarter of 2022 reaching 5.44 percent (yoy).

"Still holding back the price of subsidized fuel and 3-kilogram LPG have a big contribution in maintaining the purchasing power of the middle and lower groups," he said in Jakarta, Friday, August 5.

According to him, the provision of this subsidy is very appropriate in the midst of soaring energy prices so that domestic prices are not too high and people, especially the lower middle class, can still consume.

Based on data from the Central Statistics Agency (BPS), household consumption which grew 5.51 percent (yoy) became the source of Indonesia's highest economic growth in the second quarter according to expenditure, which was 2.92 percent.

Not only subsidies, Bhima said the full payment of holiday allowances (THR) for private employees also contributed to improving the purchasing power of the group of wage workers. This was further encouraged by the relaxation of community mobility, especially during the momentum of the month of Ramadan and Eid including the policy of being allowed to go home.

"That has the most significant impact on the growth of household consumption to reach 5.51 percent," said Bhima.

According to him, Indonesia is still benefiting from the boom in coal, nickel and plantation commodity prices and even inflation that was maintained at around 4.35 percent (yoy) in June due to entrepreneurs still holding back on price increases at the consumer level.

"But we must not be complacent by this positive growth because the challenges in the second semester are much tougher," he concluded.