BI Reveals 2 Sectors Supporting Indonesia’s Economic Growth in 2023

Indonesia's Processing/manufacturing Industry

Bank Indonesia estimates that Indonesia’s economic growth will remain strong this year. The two sectors that have become the main pillars of this growth are increased household consumption and investment.

Bank Indonesia (BI) estimates that the domestic economy will continue to grow solidly in the range of 4.5 to 5.3 percent in 2023. This growth will be supported by the two sectors above.

The Central Statistics Agency (BPS) has released Indonesia’s economic growth figures in 2022, which are recorded at 5.31 percent.

Head of the BI Communication Department Erwin Haryono said that this achievement had far increased from the previous year’s achievement of 3.70 percent. This figure is a good achievement amidst the global economic slowdown.

The background for this high growth forecast is due to several reasons, such as increased social mobility after the abolition of the PPKM policy, improved business prospects, increased inflows of Foreign Investment (PMA), and continued completion of National Strategic Projects (PSN).

Meanwhile, economic growth in the fourth quarter of 2022 was supported by almost all components of GDP from the expenditure side.

Household consumption grew by 4.48 percent in line with increased mobility of the people, including Christmas and New Year’s National Religious Holidays (HBKN) celebrations, as well as the continued distribution of social assistance.

Exports in 2022 recorded continued high growth of 14.93 percent, driven by the still strong demand from major trading partners.

Overall investment growth was also slightly restrained at 3.33 percent due to low construction investment.

Previously reported, The Central Statistics Agency (BPS) said Indonesia’s economy in 2022 grew 5.31 percent (year on year/yoy), the highest since 2013.

BPS data noted that Indonesia’s economy in 2013 reached 5.56 percent. Since then, the growth rate has slowed. This time it has strengthened again after contracting 2.07 percent in 2020.

Meanwhile, economic growth for 2022 is very strong, in line with the realization in the first to fourth quarters which consistently grow above 5 percent.

In the first quarter, it grew 5.02 percent. Then in the second quarter, it rose to 5.46 percent, and in the third quarter, it jumped 5.73 percent so that in the fourth quarter it grew 5.01 percent.