BI Predicts There Will Be an Economic Slowdown in 2023

Source: Dimas Ardian/Bloomberg

Bank Indonesia (BI) predicts that there will be an economic slowdown in 2023. BI even estimates that the Indonesian economy will grow by 4.37% in 2023.

This is reflected in the assumptions of the Bank Indonesia Annual Draft Budget (RATBI) 2023 which was presented at the BI and DPR RI Working Meeting, Wednesday (23/11/2022).

“The macroeconomic assumptions used by Bank Indonesia in compiling the 2023 RATBI are as follows, 4.37% economic growth, 3.61% inflation, and an exchange rate of IDR 15,070/USD,” said the 2023 RATBI document read out by the DPR.

This economic growth assumption figure is far below the 2023 state budget figure which is set at 5.3%. This predict shows economic slowdown in 2023.

Previously, at the Working Meeting, Tuesday (22/11/2022), BI Governor Perry Warjiyo revealed that this assumption was made with care and full consideration.

“We put forward very careful assumptions where the target is to control inflation more quickly so that it requires an increase in interest rates and controlling the rupiah exchange rate so that it remains stable and strengthens,” said Perry.

Furthermore, the Minister of Finance Sri Mulyani has actually stated several times that the economic challenges will be even more severe in the future. These problems are unpredictable.

All of that, according to Sri Mulyani, will have an impact on the economy, from a macro and micro perspective. So the assumptions used in the 2023 state revenue and expenditure budget (APBN) must be appropriate.

“Various scenarios for global inflation that have soared high and provide a possibility for the economic performance of developed countries must be considered as dynamics that have the potential to affect economic growth,” She said.

Thus, she sees a tendency for Indonesia to grow below 5.3%.

“If we look carefully at 2023, there is a tendency for downward revisions to the economic projection,” said Sri Mulyani at the Commission XI Working Meeting with the Government.