No Religious Holidays, Indef Expects Economic Growth In Quarter III To Slow Down

Illustration (Photo: Doc. Antara)

JAKARTA - The Institute for Development of Economics and Finance (Indef) estimates that Indonesia's economic growth in the third quarter will slow down. In fact, it is predicted that it will not be more than 5.44 percent.

Indef's Executive Director, Tauhid Ahmad, said that economic growth would only be stuck at the 5 percent level.

The reason is that there are no seasonal factors for religious holidays that support economic growth as in the second quarter of 2022.

On the other hand, said Tauhid, government consumption which should be able to support economic performance in the midst of the war between Russia and Ukraine actually experienced a downward trend. Therefore, he said, the pace of economic growth will slow down.

"Indef projects that economic growth in the third quarter of 2022 will decline by 5 percent yoy," he said in a virtual discussion, Sunday, August 7.

In the absence of seasonal moments of religious holidays that encourage consumption, such as Eid al-Fitr or Christmas, in the third quarter of 2022, said Tauhid, the government needs to tackle the issue of inflation which is starting to undermine people's purchasing power.

"Inflation is focused on volatile price inflation and inflation regulated by the government," he said.

In addition, continued Tauhid, government spending also needs to be accelerated to help maintain economic growth.

"Shopping that needs to be encouraged in the third quarter is goods and capital expenditures so that their contribution to economic growth becomes positive," he said.

Similarly, Deputy Director of Indef, Eko Listiyanto said that the challenges ahead are much more difficult. Especially for the third and fourth quarters.

Therefore, he reminded the government not to be euphoric about economic growth in the third quarter of 2022.

"We also remind you not to be too euphoric just yet. Because the challenges ahead, especially in the third and fourth quarters are quite large. Especially in the third quarter where the momentum of seasonal luxury, whether it's religious holidays or large events, is relatively non-existent and that has implications too economic performance," he said.