Minister of Finance: Indonesia Has Passed a Critical Period

Finance Minister, Sri Mulyani

The Minister of Finance of Indonesia, Sri Mulyani, emphasized that Indonesia had passed a critical economic period. This is evidenced by the Indonesian economy that managed to grow 5.44% in the second quarter of 2022.

The realization of the economic rate in the second quarter of 2022 was higher than Indonesia’s economic growth in the first quarter of 2022 which was 5.01 percent (YoY).

Sri Mulyani, in the PKKMB UI event broadcast via YouTube, Monday (8/8/2022), said, “Indonesia is one of the countries that are fast in economic recovery and is stable. When a crisis occurs, Indonesia’s indicators have passed a critical level.”

This passing a critical period is clearly different from a series of other countries, both developed and developing. The United States (US) has now fallen into a recession hole. Turkey and Argentina have also fallen into a financial crisis.

Another indicator that deserves attention is inflation. Several countries have experienced a spike in inflation above 10%, while Indonesia can still be maintained the level of 4.94% until July 2022. One of them is supported by the government’s policy of restraining energy prices through subsidies worth Rp 520 trillion.

“Inflation in Indonesia is relatively low compared to countries that are struggling, both because of commodities and crises such as Argentina and Turkey, Turkey at 80%, Argentina at above 70%,” he explained.

Furthermore, she explained that Indonesia’s economic performance was driven by the strengthening of household consumption which became the source of the highest growth, which was 5.51 percent (YoY) or contributing 2.92 percent to national economic growth.

Then, economic growth in the second quarter of 2022 was also supported by export performance which grew 19.74 percent (YoY) or contributed 2.14 percent to the realization of national growth.

“Increased public consumption activity during the period of Ramadan and Eid al-Fitr is a key factor driving growth in the second quarter of 2022. Amid the dynamics of the global economy, Indonesia’s exports are also still growing high,” he explained.

Meanwhile, in terms of business fields, the processing industry, which is still the main contributor to national domestic product (GDP), was recorded to be able to grow 4.01 percent. The processing industry contributed the most to growth, amounting to 0.82 percent.

Then, the tourism support sector, such as the transportation and warehousing sector, as well as accommodation and food and drink also grew significantly, having previously been significantly affected by the Covid-19 pandemic in 2020 and 2021.

Sri Mulyani also hopes that the achievement of excellent economic growth can be maintained amidst the risks of the world economy which is still shrouded in uncertainty. She said that the performance was the result of hard work, effort, and the cooperation of all Indonesian people.

“This is proof that the national economic recovery process continues and strengthens. The #Uangkita APBN also plays a very important role, namely as a reducer of global pressure, especially for low-income people,” said the former World Bank Managing Director.