East Java’s Economy Shows Impressive Improvement


Post-pandemic economic recovery looks very good in several regions. East Java’s economy in 2023 is expected to continue to grow positively and be moderated due to the impact of the global economic turmoil.

This was conveyed by the Head of the Bank Indonesia Representative Office in East Java, Budi Hanoto. He said that Bank Indonesia estimates Indonesia’s economic growth next year will be at 4.5 percent – 5.3 percent. While the East Java economy is estimated to be at 4.9 percent – 5.3 percent, with an inflation rate of 3+-1 percent.

“East Java’s economy next year will continue to grow positively but moderated or will grow lower than in 2022,” he said, Friday (23/12/2022).

He said global factors that had quite a bearing on Indonesia’s economic performance were geopolitical conflicts, global supply chain disruptions, protectionist policies, rising global inflation, China’s zero policy, and monetary policy tightening.

“The economic challenges going forward are escalating global economic uncertainty, fiscal consolidation, and the still limited MSME financing schemes are also the main challenges,” he said.

Even though East Java’s economy is expected to grow lower next year than in 2022, East Java’s economic recovery will still continue supported by the household consumption sector, investment, and strong foreign exports from the demand side.

Meanwhile, from the supply side, there are manufacturing, trade, agriculture, and construction industries.

“Covid-19 which is more under control will improve the domestic economy such as the expansion of the economic sector, increasing people’s mobility, investment, and household consumption,” said Budi.

In addition, he continued, next year there will be preparations for general elections which will encourage government consumption and Non-Profit Institutions that serve households (LNPRT), as well as the large contribution of MSMEs to the East Java economy,” he explained.

Budi added another potential that will sustain East Java’s economy is continued government and private investment, one of which is from the continuation of the Perpres 80/2019 project which is believed to increase output to GRDP by 2.84 percent to 6.63 percent.