Sri Mulyani Explains The Cause Of The Suspension Of Indonesia's Economic Growth

JAKARTA - The Central Statistics Agency (BPS) announced that Indonesia's economic growth in the third quarter of 2023 reached 4.94 percent year on year (yoy). However, when compared to the second quarter of 2023, Indonesia's economy grew 1.6 percent.

Finance Minister Sri Mulyani Indrawati said that the slowdown in Indonesia's economic growth was due to lower household consumption growth compared to the previous quarter.

"If we compare it with the outlook that so far, the growth in household consumption issued by BPS is relatively lower than we expect," Sri Mulyani said at a press conference, Monday, November 6.

For information, household consumption growth in the third quarter of 2023 was 5.06 percent on an annual basis or year on year (YoY). This figure is slightly lower than the growth in the second quarter of 2023 of 5.22 percent.

Sri Mulyani said that household consumption growth did not match expectations due to climate change and geopolitical problems, causing raw material prices to rise.

"We need to see what the effect is. Is it psychological with El Nino's condition, rice prices are rising, and various factors," he said.

Even so, Sri Mulyani saw the growth of Gross Fixed Capital Formation (PMTB) in the third quarter of 2023 of 5.7 percent, this figure was higher than the government projects.

"The manufacturing industry and the entry of capital inflows are still very positive, we will try to keep it going," he said.