Bank Indonesia Predicts That the Indonesia’s Economy Will Grow 5.01 Percent in 2023

JAKARTA - Bank Indonesia (BI) predicts that Indonesia's economic growth this year will reach 5.01 percent in the 2023 BI annual budget (ATBI).

"We estimate economic growth this year to be 4.5 percent to 5.3 percent. "Our estimate can still be assumed that the ATBI prognosis is 5.01 percent," said BI Governor Perry Warjiyo, quoted from ANTARA, Tuesday, November 14.

According to Perry, Indonesia's economy in 2023 will grow well and be strong, one of which is thanks to the synergy and coordination of government and BI policies in maintaining stability and growth from the negative impacts of global turmoil.

Economic growth at the level of 5 percent is expected to continue next year, in line with domestic demand conditions driven by increases in salaries for state civil servants (ASN), holding elections, and the development of the Indonesian Capital City (IKN).

Meanwhile, ATBI's 2023 inflation prognosis is set at 2.84 percent, remaining within BI's target, namely 3 plus or minus 1 percent.

Perry explained that inflation had fallen and was under control faster than expected, where at the end of the third quarter of 2023 inflation was recorded at 2.28 percent. Meanwhile, inflation in October or the beginning of the fourth quarter was recorded at 2.56 percent.

Inflation next year is estimated to remain maintained at the target of 2.5 plus or minus 1 percent, where the ATBI 2024 plan sets inflation projections at 3.20 percent.

The BI Governor explained that efforts to control inflation emphasize consistent monetary policy and close synergy between BI and the government, both central and regional, through the Central Inflation Control Team (TPIP) and the Regional Inflation Control Team (TPID).

This was done by strengthening the National Movement to Control Food Inflation (GNPIP) in various regions.

The rupiah exchange rate at the end of 2023 is estimated to be at IDR 15,280, lower than ATBI's initial 2023 forecast of IDR 15,070 due to increased global financial market uncertainty.

Even so, the performance of the rupiah exchange rate is relatively better compared to the depreciation of the currencies of a number of countries in the region and globally.

Meanwhile, in the future, Perry estimates that global financial conditions will gradually improve and have an impact on improving the performance of the rupiah, so that BI sets the rupiah exchange rate in 2024 at IDR 15,510.