Economic Growth Remains Strong Supported By Improved Domestic Consumption

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA Bank Indonesia (BI) projected the domestic economy in the second quarter of 2023 is expected to grow better. BI Governor Perry Warjiyo said that this indication was supported by increased household consumption and investment.

"Indonesia's economic growth remains well supported by domestic demand," he said at a press conference after the Board of Governors Meeting, Tuesday, July 25.

Perry explained that household consumption increased driven by continued increase in mobility, improving income expectations, and controlled inflation, as well as positive impacts from the National Religious Holidays (HBKN) and giving the 13th salary to State Civil Apparatus.

"Investment is also increasing, especially non-development investments in line with positive export performance and continuing downstreaming," he said.

Meanwhile, continued Perry, exports of goods are expected to slow down in line with the weakening global economy, while service exports are growing greatly influenced by the increase in foreign tourist visits.

Based on the business field, economic growth is mainly supported by the processing, wholesale and retail trade, as well as information and communication. Then, spatially economic growth is mainly supported by the growth of the Kalimantan and Java regions which are still strong in line with the maintenance of domestic demand.

"With these developments, economic growth in 2023 is estimated to reach the range of 4.5 percent to 5.3 percent," he said.

VOI noted that Indonesia's economic growth in the first quarter of 2023 closed at 5.01 percent. This score extends the record for economic growth rates that have been maintained above 5 percent in recent times.

"Bank Indonesia will continue to strengthen the synergy of the government's fiscal stimulus with a macroprudential stimulus of Bank Indonesia to encourage economic growth, especially in terms of demand," concluded Perry.