Coordinating Minister Airlangga: Indonesia's Economic Growth Continues To Show Positive Trends

Illustration (Photo: Doc. Antara)

JAKARTA - Coordinating Minister for Economic Affairs Airlangga Hartarto revealed that economic growth showed a positive trend.

In fact, this trend continues amid efforts to maintain the momentum of the national economic recovery.

Airlangga said Indonesia managed to maintain inflation at the level of 4.69 percent. Meanwhile, developed countries such as the UK experienced a significant increase in inflation reaching 10 percent.

"The trend of inflation of various countries in the world has experienced a significant increase due to the food and energy crisis. The United States has fallen to 8.3 percent, the European Union 9 percent, the UK 10 percent, and Germany 7.9 percent, while Indonesia in July 2022 is still 4.69 percent," said Airlangga, Monday, September 19.

Airlangga said, Indonesia's economic growth also continues to show a positive trend, this can be seen from the declining poverty and unemployment rate and accompanied by the improving social situation of the community.

"The trade balance is in a surplus of 28 months in a row and this shows that Indonesia in its economic handling is on the right track. In August 2022, the trade balance is still in surplus at 5.76 billion US dollars and the non-oil and gas sector is the main key," said Airlangga.

Indonesia's Economy Can Grow Above 5 percent

Bank Mandiri economist Faisal Rachman said that with the achievement of the second quarter of 2022, Indonesia's economic growth has the opportunity to record an lift of more than 5 percent.

"If we ourselves for 2022, Indonesia's economic prediction is still growing in the range of 5.17 percent," he said.

Faisal said the trade surplus was bigger than expected, even the largest in four months.

Indonesia's trade surplus on August 22 to 5.76 billion US dollars increased compared to the July 22 period of 4.22 billion US dollars.

In the first eight months of this year, said Faisal, the trade balance recorded a surplus of 34.92 billion US dollars, greater than the surplus in the same period 2021 of 20.71 billion US dollars.

"We still see that the trade surplus tends to narrow in the future. We hope that imports can balance exports in line with the acceleration of domestic economic recovery," he explained.

Faisal said that the Indonesian economy grew stronger than expected in the first semester of 2022.

This is influenced by strong production and consumption activities.

"This means that the demand for imports of raw materials and capital goods will be stronger to follow," he said.

Faisal noted that the current transaction balance in 2022 has the potential to record a surplus of 0.00 to 0.45 percent of GDP which is able to maintain foreign exchange reserves and stability in the rupiah exchange rate.

"In addition, the government and Bank Indonesia's efforts to reimpose sanctions for exporters who do not place export revenue (DHE) in the country can further support this stability," he concluded.

The Board of Representatives was conveyed by the Research Director of the Institute for Development of Economics and Finance (Indef), Berly Martawardaya.

He considered that Indonesia would not be in a recession. However, it will be difficult to maintain the target of economic growth above 5 percent.

"It's a bit heavy, saying the trend is positive but it's a bit difficult to maintain, but it's not a recession, I'm not saying a recession, to be above 5 more will be difficult. We haven't talked about poverty yet because when it comes to inflation, it usually increases poverty," said Berly.

The geopolitical conflict between Ukraine-Russia is expected to continue to heat up, Berly said, giving us uncertainty about energy prices.

"The political focus of uncertainty will increase so that the prices and impetus inflation will be higher in the next six months, the trend will increase," said Berly.

Then the impact of the price of fuel increases will be felt later, affecting inflation.

"Because of historical, the increase in bbm is usually an additional on top inflation of between 2-3 percent. The government's challenge in lower end should not be close to three or more than three percent of inflation. Especially transportation and basic necessities can be reluctant to be suppressed," he explained.

Therefore, Berly said, the government's big task is to maintain the price of basic necessities and also transportation.

"If inflation is high, then Bank Indonesia must participate in raising interest rates. Because if inflation has a real value of rupiah, it will decrease, if the difference is too far from the dollar or euro, we have a capital outflow of rupiah, it will weaken, BI will be forced to raise interest rates," explained Berly.

One of the pillars of the Indonesian economy is exports. However, said Berly, state revenues from trade will definitely decrease if superpowers experience a slowdown.

"We see this year, a large source of growth is exports, so if the west purchasing power is reduced, then exports will decrease and our growth can be affected," said Berly.