BI Cuek China Delays, A Source Of Indonesia's Growth Turns Out From Here

Governor of Bank Indonesia Perry Warjiyo. (Photo: Doc. Antara)

JAKARTA Bank Indonesia (BI) does not deny that China's economic slowdown has its own excesses on the Indonesian economy. This is because China is one of Indonesia's largest trading partners in the region or globally.

However, BI Governor Perry Warjiyo stated that the pressure caused by the country in East Asia was not significant.

China's economic decline has indeed reduced our export performance, although (Indonesian exports are currently still relatively high)," he said during a press conference after the Board of Governors' Meeting (RDG) in Jakarta, Thursday, August 24.

Perry's optimistic attitude is based on the fact that the source of national economic growth is dominated by factors originating from within the country.

Our economic growth is domestic. Household consumption is high, and this is mainly in service or tertiary sectors, such as trade, transportation, warehousing, accommodation, food and drink," he said

Perry explained that the contribution of young people was also a supporting force in spurring growth.

The reason is, the millennial generation, which amounts to 17 percent of the polluation, has an increasing purchasing power.

"This situation clearly encourages investment in the non-development sector," he added.

For information, Indonesia's economic growth at the end of the second quarter of 2023 was 5.17 percent.

The score spans a record growth of above 5 percent in seven consecutive quarters.

Separately, the Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu, previously mentioned that China's slowdown symptoms had a fairly limited impact on Indonesia.

"We see that there is indeed a risk from China's economic mitigation even though (they) have reopened their economy," he said in a press conference on the State Budget recently.

Referring to data reported by the Central Statistics Agency, Indonesia's source of economic growth according to spending is dominated by household consumption of 51-52 percent.

Followed by the Formation of Gross Fixed Capital (PMTB) aka investment of 29 percent, export 24 percent, then government consumption, Non Profit Institutions that serve households (LNPRT), and exports that each contribute single digits.