Chatib Basri Predicts Indonesia's Economic Growth To Be 'Only' 4.8 Percent In 2023

Senior economist, Chatib Basri. (Photo: Doc. Antara)

JAKARTA - Senior Economist Chatib Basri estimates that the Indonesian economy will continue to grow but weaken to 4.5 to 5 percent on an annual basis in 2023.

"The World Bank and the International Monetary Fund (IMF) predict the Indonesian economy is 4.8 percent, this is not too bad," he said in the 2023 BSI Global Islamic Finance Summit (GIFS) webinar at the Ritz Carlton Hotel, Jakarta, quoted from Antara, Thursday, February 16.

He said Indonesia had a small potential for recession because export donations to Gross Domestic Product (GDP) were only around 24.72 percent or lower than household consumption which reached 51.65 percent.

"If there is a global risk, countries that are less integrated with the global economy will be limited. The share of Indonesia's exports to GDP is only 25 percent, so if there is a negative impact from the global economy, only 25 percent will be affected," he explained.

He said investment entering Indonesia has the potential to weaken in 2023, but compared to other countries experiencing a recession, Indonesia is still attractive as an investment destination country.

"So because the country's economic performance in other parts of the world is much worse, inflow will still occur. This gives hope both in the stock market and in the bond market," he said.

The government also needs to prioritize the distribution of state budgets to the lower middle class to maintain their purchasing power, amid efforts to restore the deficit in the State Revenue and Expenditure Budget (APBN) to below 3 percent of GDP.

"Because the fiscal deficit is targeted to be below 3 percent of GDP, fiscal can only encourage economic growth, if state spending is allocated to support the purchasing power of the middle and lower income group," he said.