It was previously reported, the IMF predicted that Indonesia would not be hit by a recession this year among many countries threatened by it. Indonesia’s economic projections point in a different direction. The Asian Development Bank (ADB) even estimates that national economic growth can reach 5.2%.
Jiro Tominaga, ADB Director for Indonesia in a press release, Thursday (21/7/2022), said, “Economic activity in Indonesia continues to return to normal, while COVID-19 infections are still under control, despite the recent increase in the number of cases.”
ADB said that national economic growth can reach 5.2% This estimate is indeed higher than previously submitted, which is 5%. The main driving factors of the economy are good domestic demand and stable export growth.
The revised growth forecast in ADO Supplements is also in line with the rising growth projections for Southeast Asia. For the region, ADB is now projecting 5.0% growth in 2022, up from April’s projection of 4.9%.
In terms of inflation, ADB sees an upward trend. However, it is still under the assumption of the government and Bank Indonesia (BI). Previously, ADB predicted inflation of 3.6%, but now it has changed to 4%.
By 2023, ADB projects that the Indonesian economy will grow 5.3% and inflation will reach 3.3%.
“Rising inflation lowers household purchasing power, but high prices for several key export commodities bring in both export earnings and fiscal income, allowing the government to assist with rising food, electricity, and fuel prices, while still reducing the budget deficit.”
It was previously reported that Indonesia will be in a different direction, with an economic projection of around 5%.
This was revealed by the Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva last weekend.
Several reasons keep Indonesia from recession. Among other things, proper handling of COVID-19 and preventing a deep economic downturn.
“When Covid-19 is here, Indonesia has managed to prevent a significant decline in economic output, not as deep as in many places,” said Georgieva.
Despite facing the effects of the Russian war in Ukraine, Georgieva said Indonesia continued to record positive growth, which she believes will continue to grow well.
“(Indonesia) is facing a second shock in the war in Ukraine by recording economic growth above 5%, with inflation at 4%, and with a very good budget that can provide support, especially to the vulnerable population,” she said.
This figure itself, according to Georgieva, is much lower than other countries in the world, so she feels proud of Indonesia’s achievements.