Indonesia's Economic Growth Enters The Big Four Of The G20, Indef: Good Achievements But There Are Notes

JAKARTA - The Institute for Development of Economics and Finance (Indef) research institute said that the achievement of economic growth in the first quarter of 2022 which was 5.01 percent year on year (YoY) illustrates the trend of recovery that continues to improve.

Deputy Director of Indef Eko Listiyanto said that this score made Indonesia ranked fourth on the list of G20 countries that scored the highest economic growth. The top three places were occupied by Saudi Arabia with 9.60 percent, Italy with 5.80 percent, and France with 5.30 percent.

"This does not include the nine countries that have not yet submitted their economic reports, such as India, Russia, Canada, South Africa, and others", he said in a webinar today, Monday, May 11.

According to Eko, so far the growth level achieved by Indonesia is still relatively good. However, he gave several important notes that can be used as lessons so that performance consistency can be continued until the end of the year.

First, the stalled engine of economic growth from the government consumption component. Eko revealed that the main pillars of successful results in early 2022 were exports (16.22 percent), household consumption (4.34 percent), and investment (4.09 percent).

"Meanwhile, the government's consumption component experienced a slowdown of minus 7.74 percent YoY", he said.

Second, the low base effect of the household consumption component keeps the rate of consumption growth positive in the midst of pressing pressures on rising prices.

"Household consumption growth of 4.34 percent cannot be separated from the low consumption growth in the first quarter of 2021 at negative 2.21 percent. Thus, the consumption rate remains positive even though throughout the first quarter of 2022 there were several increases in the price of basic commodities", he said.

Three, the growth of the import component accelerates, the risk of the trade deficit repeating itself.

“The import component grew 15.03 percent. This makes the pace of import growth quite fast and can erase the trade balance surplus that has occurred in the last 23 months if we are not careful", he said.

However, Eko believes that several positive indicators need to be maintained. The high global commodity prices became a windfall that controlled export performance.

"The high price of export commodities is a blessing for the Indonesian economy in the midst of a famine when the government's consumption performance is only half-hearted", he concluded.