BRI: Despite The Slowdown, MSMEs Continue To Grow In The Middle Of The Increase In Inflation

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA PT Bank Rakyat Indonesia (Persero) Tbk (BRI) stated that the micro, small and medium enterprises (MSMEs) sector is still showing optimistic business growth amid the current global challenges. This condition was recorded in the 2022 Qual III MSME Business Index released by the company.

It is stated that the positive rate of MSMEs in the third quarter of 2022 is reflected in the business index score of 103.2 or in the optimistic phase (above level 100).

BRI President Director Sunarso said, although it decreased from the second quarter of 2022 which was 109.4, this achievement should be appreciated considering that the people's business sector must survive the increasing inflation fluctuation.

MSMEs have a strong multiplier effect on the Indonesian economy. Therefore, BRI will continue to focus on developing MSMEs amidst the current increase in inflation through comprehensive empowerment and financing," he said in an official statement on Sunday, November 20.

According to Sunarso, the decrease in the index was also triggered by post-Idul Fitri sales volume and subsidized fuel price increase in September 2022. He also explained that this survey revealed that some MSME actors lowered the purchase of raw materials due to price increases so that production volume decreased.

The relatively high rainfall causes the failure of the horticultural harvest, fishermen are constrained to go to sea, and make daily mining and construction activities experiencing obstacles. Almost all components of the MSME Business Index compilation in the third quarter of 2022 have decreased. The biggest thing happened to the production/sale volume component due to the passing of the Eid period made demand return to normal levels," he said.

Sunarso added that the average selling price had increased, although not as high as the previous quarter, considering that some MSME actors did not increase the selling price so that their sales volume would not be further eroded. With limited sales volume and a smaller increase in selling prices, sales turnover also decreased.

Furthermore, with rising raw material prices and weak sales, the growth in ordering and supply of input and inventory has slowed down. In the midst of these challenges, the component of business investment continues to increase in line with the optimism of the Indonesian economy which is expected to remain good in the future.

"Seen sectorally, the MSME business is still able to grow limitedly, except for the agricultural sector. The decline in the agricultural sector's MSME business is caused by the relatively high price of input goods and difficult to obtain, disease attacks on livestock and plant pests, less conducive weather factors, and the prices of several declining plantation commodities such as rubber and palm oil," he said.

Meanwhile, the hotel and restaurant sector experienced a slowdown in growth due to sales rates returning to normal levels after the passing of the Eid period and the declining purchasing power of the people, "he continued. For information, MSMEs provide high employment opportunities in Indonesia with an estimated 119.6 million workers or 96 percent of the total workforce.

Through a strategy to empower and encourage MSMEs to continue to advance to class, BRI assesses that this step will open up job opportunities and encourage the welfare of the people, as well as the Indonesian economy.