Acceleration Of Vaccination To Bank Indonesia's Special Strategy, 2022 Economic Growth Can Reach 5.3 Percent

JAKARTA - Bank Indonesia (BI) positively welcomed the achievement of economic growth in the first quarter of 2022 which was 5.01 percent on an annual basis (year on year / yoy).

Head of the BI Communications Department Erwin Haryono explained that if the central bank was ready to issue a special strategy to be able to realize the growth target of 4.5 to 5.3 percent for the entire 2022 period.

"Going forward, the improvement in the domestic economy is expected to continue to reach growth of 4.5 percent to 5.3 percent, supported by accelerated vaccinations, wider opening of the economic sector, as well as policy stimulus from Bank Indonesia, the Government and other relevant authorities,” he said in an official statement quoted on Tuesday, May 10.

According to Erwin, this optimism is supported by the government's decision to loosen people's mobility in line with the increasingly controlled rate of the spread of COVID-19 in the country.

"Indonesia's economic improvement continues in line with the increasing mobility of the people in the midst of increasing geopolitical tensions between Russia and Ukraine," he said.

Meanwhile, several stimuli that have been released by BI to support economic recovery during the pandemic include lowering interest rates six times since 2020 by 150 bps to 3.50 percent.

Then, carry out liquidity injection (quantitative easing), relax the provisions for down payment for credit/motor vehicle financing and the LTV/FTV ratio for credit/property financing, and encourage transparency in banking lending rates (SBDK).

Then, strengthening the macroprudential intermediation ratio (RIM/RIM Syariah) policy by including export notes as a financing component, and gradually enforcing disincentive provisions in the form of RIM/RIMS demand deposits to encourage lending/banking financing to businesses and exports.