Indef Indefly Target Economic Growth Of The Republic Of Indonesia 2022 Becomes 5.1 Percent

Illustration. (Photo: Unsplash)

JAKARTA - The Institute for Development of Economics and Finance (Indef) increased Indonesia's economic growth projection in all of 2022 from 5 percent on an annual basis (year-on-year/yoy) to 5.1 percent (yoy). The revision was made after the realization of economic growth in the third quarter of 2022 which shot high, reaching 5.72 percent (yoy). "We corrected our economic growth projections to be a little more optimistic, although it is still below the government which is at the level of 5.2 percent (yoy)," said Executive Director of Indef Tauhid Ahmad at the Indef Response event on Economic Growth Quarter-3 of 2022, quoted from Antara, Wednesday 9 November. Although economic growth in the third quarter of this year is higher than the previous quarter which amounted to 5.45 percent (yoy), Tauhid reminded that there is the potential for a slowdown in economic growth in the fourth quarter of 2022 to 5.3 percent (yoy). The reason is that the increase in inflation is higher than in the previous quarter as energy and food prices have not yet slowed, followed by a weakening of the rupiah exchange rate. This is an alarm to maintain the momentum of economic recovery in the remaining one quarter of this year. Therefore, he suggested that there are three things the government can do in the rest of the year, namely the first is to accelerate capital expenditure and goods expenditure, where until October 2022 the realization of new capital expenditures will reach around 66.83 percent and goods expenditures of 66.44 percent. "I think there needs to be a strategic breakthrough so that with a very limited time, namely two months, all expenditures can be completed," he said. If not, Tauhid assessed that the remaining budget financing (SiLPA) which is currently quite large will not mean anything, even though many people need it. As of September 2022, the SILPA State Budget (APBN) was recorded at IDR 490.7 trillion. The second suggested step is to moderately adjust the benchmark interest rate of Bank Indonesia (BI) because Indef feels that the adjustment of the BI policy interest rate is late, so it is necessary to moderate policy interest rates to continue to follow the development of inflation that has occurred so far and is greatly influenced by the dynamics of global conditions. Finally, the third step is the need to strengthen the domestic market for various products that have competitiveness in the global market, as well as accelerate various import industries amidst the strong flow of imports of various industrial products so that economic slowdown does not occur.