Economist: Indonesia's Economic Growth In 2022 Will Not Be Up To 5 Percent

Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira. (Photo: Doc. Antara)

JAKARTA - Finance Minister Sri Mulyani Indrawati is optimistic that Indonesia's economic growth in the fourth quarter of 2022 will grow above 5 percent, in line with increased public consumption at the end of the year.

"In the fourth quarter, economic growth (Indonesia) will remain strong above 5 percent or around 5 percent, because we see the condition of public consumption still growing very strongly, even mobility towards the end of the year increases," he said at the CEO of the Banking Forum, as quoted on Wednesday, January 11.

Not only that, Sri Mulyani's optimism is based on tax revenues in areas from restaurants, hotels, to parking fees which are estimated to increase by 120 percent. He saw this not only happened in Jakarta, but in almost all regions.

"Regional tax revenues from the tax side of restaurants, hotels and parking have increased by not 11 percent, but 20 percent. The increase is 60 percent, even 120 percent, this is not only a phenomenon in Jakarta, this is a phenomenon in almost all regions," he said.

Even so, a number of economic observers think this is not fully possible. Economist and Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira predicts Indonesia's economic growth in the fourth quarter of 2022 will only range from 4.8-4.95 percent or lower than 5 percent.

Bhima said that one of the factors that triggered it was the slowdown in exports and consumption.

"There is pressure from indications that export performance has experienced a slight slowdown. From commodity prices, moderation has also begun, but the most influential thing is consumption," Bhima told VOI, Wednesday, January 11.

"Why? Because compared to the fourth quarter of 2021, that, right, the growth is relatively high, yes, in the fourth quarter of 2022, there is still an easing of mobility, but Nataru's momentum has not been maximized because there is an increase in inflation, an increase in interest rates, it is also an obstacle to the rate of household consumption," Bhima added.

Furthermore, said Bhima, this condition can be a reflection that the challenges in the first quarter of 2023 will be even more complex. "So, it is also necessary to watch out for the slightly slowing retail sales indicator that can continue in the first quarter of 2023," he said.

Therefore, Bhima suggested the need for a stimulus from the government in early 2023, such as tax relaxation, opening up greater job opportunities, and rapid absorption of budget spending at the central and regional levels.

"So that later in the first quarter of 2023 there will be a disbursement of the budget that can move the wheels of the economy, especially in the regions," he concluded.