Convinced that Indonesia's 2023 economy is still positive, IDIC urges banks not to be afraid and pessimistic

JAKARTA - Chairman of the Board of Commissioners of the Deposit Insurance Corporation (LPS), Purbaya Sadewa, is optimistic that the Indonesian economy will still be able to grow well next year amid the threat of a global recession.

"I can see that we can still grow well next year. So friends in the banking sector don't need to be too afraid and pessimistic about the future economic prospects", he said, quoted by Antara, Thursday, October 6.

Purbaya said many people are worried that next year's economy will be difficult because the global recession is predicted to be in line with various challenges after the COVID-19 pandemic.

These challenges include rising inflation and energy prices, the weakening of several major world economies such as the United States and China, and rising interest rates.

This makes people live in an era filled with turmoil, uncertainty, complexity, and ambiguity.

In fact, various international institutions estimate that the global economy will only grow by 2.9 percent to 3.2 percent in 2022, while next year it will only grow by 2.8 percent to 3 percent.

"The economic slowdown combined with rising prices could eventually trigger the risk of stagflation in some countries", he said.

However, Purbaya said that Indonesia had found an effective way to avoid and relieve external pressure so that it was trained in dealing with crises.

"If I look at our experience so far and the strategies we have implemented so far, we have found a surefire way to avoid or relieve negative pressure from outside", he said.

He said that Indonesia's business cycle is at least seven years short, so if Indonesia goes into a recession in 2020 and starts to recover in 2021, this improvement should be able to expand to a maximum of 2028.

"That's the least. If we are a little smart, we can expand in 10 years or until 2031", he said.