In a recent statement, Perry Warjiyo, the Governor of the Bank of Indonesia (BI), expressed optimism regarding the prospects of economic growth for ASEAN countries despite the global economic turbulence.
He stated that there were three reasons supporting this positive outlook. Firstly, ASEAN member countries have been cautious in their macroeconomic policies, both in terms of monetary and fiscal policies.
Secondly, ASEAN countries have been innovative in policy-making across several domains, including digitalization. Finally, there is a close coordination between the government, central bank, and other relevant authorities.
Indonesia, for instance, is not solely relying on one policy response to address the current multidimensional crisis.
Warjiyo emphasized the importance of implementing a mix of policies to ensure stability and growth in the region, stating, “That is why the mix of policies is essential to be implemented, especially in ASEAN.”
He acknowledged that developing countries, including Indonesia, will still face various global disruptions, such as economic slowdowns, particularly in the United States and Europe.
Moreover, although inflationary pressures have shown a downward trend, it is expected to remain high domestically. The Federal Reserve’s interest rate is also predicted to potentially reach a level of 5.5%, remaining high for a long period, adding to the uncertainty for developing countries.
To mitigate these challenges, the Indonesian government and the central bank are working hard to ensure the country’s economic growth remains robust and stable.
Warjiyo estimated that Indonesia’s economic growth this year would range from 5.1% to 5.2%, and 5.3% next year, supported by domestic consumption, exports, and investment.
He also expressed optimism that core inflation rates would remain at 3% and that general inflation would fall to 3.5% in the second half of 2023.
Additionally, Warjiyo believes that Indonesia’s economic growth will be boosted by the rapid digitalization acceleration, especially in the field of payment systems, including digital banking and e-commerce.
This trend is also apparent in other ASEAN countries. To continue supporting economic stability and growth, BI will continue to implement a mix of policies.
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