BI Positive For IMF Report: Indonesia Rises From A Pandemic With A Strong Economy

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - Bank Indonesia (BI) responded positively to the International Monetary Fund (IMF) report which assessed that Indonesia had shown good economic recovery after the pandemic through strong macroeconomic performance, supported by the implementation of monetary and fiscal policies carefully.

Head of the BI Communication Department Erwin Haryono said that one of the central bank's contributions in maintaining the national economy is through the determination of policies that are forward looking.

"Synergy with the government has succeeded in bringing Indonesia to face global challenges in 2022 with healthy growth, declining inflationary pressure, and a stable financial system. Bank Indonesia welcomes the results of the IMF assessment," he said in a written statement, Monday, June 26.

According to Erwin, the IMF's Board of Directors expressed his appreciation and positive notes on various policies taken by Indonesian authorities during 2022.

First, the success of the authorities to return to the maximum limit of a fiscal deficit of 3 percent, faster than expected and the authorities' commitment to implement fiscal discipline.

"Second, the implementation of adequate monetary policy is to maintain price stability. Third, the resilience of the financial sector is maintained," he said.

Fourth, continued Erwin, the application of the Job Creation Law as well as the Financial Sector Development and Strengthening Law, by ensuring the appropriate implementation and sustainability of reform momentum to encourage ease of investing, increase deepening financial markets, and mitigate the impact of scarring from the pandemic.

Fifth, Indonesia's diversification strategy which focuses on downstream efforts in order to increase the added value of exports.

"And the sixth is the authority's commitment to reduce greenhouse gas emissions and deforestation," he added.

For information, the IMF in its report projects that Indonesia's economic performance will remain strong with little moderation in 2023. It is stated that the global institution is observing several risk factors that need to be watched out for, especially regarding the uncertainty of global economic and financial conditions that have the potential to affect growth outlooks.

"IMF conveys recommendations for the normalization of fiscal and monetary policies as pre-pandemic conditions, the sustainability of financial sector policies that support inclusive growth, as well as broader policy reforms in order to encourage medium-term growth," said Erwin.

Meanwhile, the IMF's positive projection is claimed to be in line with the results of the Bank Indonesia assessment which estimates that the national economic growth rate will continue in line with the progress of the reform agenda.

"Bank Indonesia, the Government and related authorities continue to strengthen policy synergies in order to maintain macroeconomic and financial sector stability, encourage business world growth, especially in priority sectors to support economic and export growth, as well as improve inclusive and green economy and finance," concluded Erwin.