Minister of Investment/Head of BKPM Bahlil Lahadalia stated that a global recession cannot be avoided, and he shared some of the economic challenges that Indonesia will face in 2023. Speaking at a press conference on investment realization for the first quarter of 2023, he emphasized that the year ahead will not be easy, and different challenges will emerge.
The first challenge that Bahlil identified is that 2023 is a political year, with both national and presidential elections taking place. This political climate may create a sense of uncertainty in the business world, as companies adopt a “wait and see” approach.
The second challenge is related to the elections, as it can create a sense of cautiousness among investors, which could potentially affect the level of investment in the country.
Bahlil’s third concern is the global economic situation, which is not in a stable condition. He cited examples of the high level of non-performing loans in the banking sectors of the US and Switzerland, which have impacted economic growth in the US and Europe. He also mentioned the ongoing tension between Russia and Ukraine, as well as the current tension between China and Taiwan.
Despite these challenges, Bahlil remains optimistic about Indonesia’s economic prospects and prays for a peaceful resolution to global conflicts. He acknowledged that a global recession is difficult to avoid, but believes that the depth of the recession can still be managed.
On a positive note, the BKPM reported that the realization of investments in the first quarter of 2023 amounted to Rp328.9 trillion, an increase of 16.5% compared to the same period last year.
Bahlil emphasized that the realization of investment had already reached 23.5% of the 2023 target of Rp1,400 trillion, which indicates a promising start to the year.
Bahlil also highlighted that the realization of investments has created job opportunities for Indonesian workers, with 384,892 workers being employed, which he said was a significant contribution to the local economy.
He added that foreign direct investment (FDI) contributed Rp177.0 trillion, or 53.8% of the total realization, which was higher than domestic investment realization of Rp151.9 trillion, or 46.2% of the total realization for the first quarter of 2023.
In conclusion, while Indonesia faces various challenges in 2023, Bahlil’s positive outlook on the economy is a good sign for investors and the country as a whole. The significant progress in investment realization in the first quarter is encouraging, and with proper management and support, Indonesia can continue to thrive amidst global uncertainty.