Economists Estimates Indonesia's Economic Growth Can Achieve 5.1 Percent By The End Of 2023

Illustration. (Photo: Doc. Antara)

JAKARTA - Indonesia's economic growth (GDP) at the end of 2023 is projected to be around 5.1 percent year on year (yoy). This was conveyed by Ryan Kiryanto, senior economist and Associate Faculty of the Indonesian Banking Development Institute/LPPI.

"The game changer that drives GDP growth is the revocation of PPKM (Enforcement of Community Activity Restrictions) which encourages a surge in the mobility of people, goods and services. The spending of household consumption is estimated to grow quite high, around 4.9% which is historically equivalent to 53% of the total formation of GDP Indonesia 2023," Ryan said in a written statement, quoted Monday, August 7.

Ryan said that the formation of gross fixed capital (PMTB) also grew positively, as can be seen from the achievement of investment value in the second quarter which remained proportionally consistent.

Next, it was stated that the trade balance surplus in 30 consecutive months also supported economic growth from export and import activities, as reflected in the achievement of the Purchasing Manager Index (PMI) in the expansion zone (above level 50, precisely around 52).

Meanwhile, foreign exchange reserves are also recorded to be quite high, ranging from US$139 billion, a figure deemed sufficient to fulfill international obligations for more than 6 months, well above the 3 month threshold.

This is reinforced by data on annual credit growth of 9% yoy and the combined stock price index (IHSG) on the IDX which reaches the range of 6,800-6,900 with the number of issuers continuing to grow. Inflation is also under control according to expectations towards the range of 2-4%.

"With the revoked PPKM game changer, the boost in household consumption soared during Eid al-Fitr celebration on April 22, supporting the consumption of acmamin (commodation, food and beverages) or the horeka sector (hotels, restaurants and cafes). Government consumption spending is also better in Quarter II than in Quarter I so as to support economic activity from the implementation of government strategic projects," Ryan explained.