High-Growing Economy, Ministry Of Finance Keeps The Momentum Of Recovery Amid Global Threats

Illustration (Photo: Doc. Antara)

JAKARTA - The Ministry of Finance (Kemenkeu) stated that Indonesia's economic expansion continues to accelerate amid an increasing risk of global economic slowdown. It was stated that the achievement of 5.7 percent year on year (yoy) in the third quarter of 2022 was a marker that the Indonesian economy could get out of the crisis that has now hit many countries.

Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu, said that this achievement needs to be underlined considering that the expansion of economic activity in the second quarter itself was very strong due to the push from the moments of Ramadan and Eid al-Fitr.

"With this growth rate, the national GDP level cumulatively until the third quarter of 2022 will exceed the pre-pandemic GDP (Gross Domestic Product) level or 6.6 percent higher than the cumulative first to third quarter of 2019," he said in a press statement quoted by the editors on Tuesday, November 8.

Furthermore, the growth rate of household consumption is still relatively high at 5.4 percent. This incision is in line with consumption indicators, including the average Riil Sales Index which grew 5.5 percent in the third quarter of 2022.

Febrio said, strengthening the government's social protection program in reducing pressure from energy price adjustments through increasing energy subsidies, wage subsidies, direct cash assistance, and distributing aid through local governments also play a role in maintaining the continuity of community purchasing power recovery and food price stability.

"This is also shown by inflation rates that are not as high as previously thought," he said.

Febrio added that the Ministry of Finance estimates that the pace of economic growth for the 2022 period will be in the range of 5.0 to 5.3 percent. It is stated that the latest economic indicators still show expansion consistency, including the Manufacturing PMI which remains expansive, growth in electricity consumption by industry and businesses is still high, and inflation rates are starting to subside.

Meanwhile, in terms of domesticity, the fairly high rate of economic growth was driven from a relatively low growth base (low base-effect) due to the high number of cases of the COVID-19 delta variant in the third quarter of 2021.

"Economic growth in the fourth quarter is expected to be moderate, especially considering the relatively slowing economic cycle at the end of the year every period, as well as high base-effect due to the pent-up demand phenomenon after PPKM Level IV relaxation in the fourth quarter of 2021," he stressed.

However, the risk of global economic turmoil that is full of uncertainty needs to be anticipated. Global manufacturing PMIs are still in the contraction zone in the last two months. High inflation trends still occur, especially in the European region and the United States.

This condition was revealed by Febrio, followed by the acceleration of tightening the benchmark interest rate of major central banks in the world.

"The ongoing momentum of economic recovery will continue to be maintained by maintaining the implementation of the 2022 State Budget which is vigilant, anticipatory, and responsive in the face of uncertain global threats and risks," he concluded.