Economic Weakening Becomes a Threat for Indonesia in the Next Two Years

Photo: Doc. Antara

JAKARTA - The 2023 Executive Opinion Survey (EOS) compiled by Zurich Insurance Group together with the World Economic Forum (WEF) shows that economic weakness is a threat to Indonesia over the next two years.

Concerns about the weakening economy in Indonesia are, among other things, related to the risks that could potentially arise from holding the General Election (2024 Election).

"Perhaps a few months earlier, we were already very busy with campaign activities, so some of the economy may have had an upside because for the campaign people bought cars, bought uniforms, then there was spending. "At the same time, there can be some people in the business sector who are a bit skeptical," said Chief Risk Officer of PT Zurich Asuransi Indonesia Wayan Pariaman, quoted from Antara, Tuesday, December 5.

In 2023, Indonesia's economic growth is estimated to be at 5.1 percent. However, the Coordinating Ministry for the Indonesian Economy revealed that the world economic slowdown and global uncertainty have the potential to become challenges in achieving the country's economic growth target in 2024.

Apart from the challenges of the economic slowdown, Indonesian entrepreneurs and executives consider other challenges to come from extreme weather which occupies the second highest position. Even though floods and hot weather are commonplace in Indonesia, the risk of environmental issues from extreme weather has quite an alarming effect on the business sector and economy.

"In our opinion, the magnitude of losses due to this weather is getting bigger and bigger, so we are worried that this could become a risk, if this materializes it could have a bigger impact. For example, I remember we paid car insurance claims due to flooding up to IDR 64 billion for just one customer because there were so many cars. "It's never happened before," he said again.

EOS 2023 also recorded the issue of infectious diseases as the third highest risk posing a threat in Indonesia.

Awareness of infectious diseases continues to be the focus of society, considering that the Ministry of Health has issued a Circular (SE) regarding "Awareness of Mycoplasma Pneumonia in Indonesia". The SE was issued because the disease, which is caused by bacterial infections in the respiratory tract, has increased by 40 percent in children in North China, China.

The next risk is related to the threat of energy supply shortages. Even though Indonesia has abundant energy, the energy produced comes from fossils. Efforts to use energy that is more environmentally friendly tend to be difficult, in part because they require large amounts of funding to develop technological innovation.

Finally, executives consider unemployment to be the fifth highest threat in Indonesia.

“From a global perspective, including Indonesia, economic challenges remain the main issue in the five highest risks. However, concerns over risks related to extreme weather and infectious diseases in Indonesia have spread and could impact various sectors. "Seeing this, Zurich is ready to increase its collaborative role with many stakeholders, business people, and other related parties to manage risks and reduce the impact on society, this is part of our commitment to creating a better future," said Wayan.