National Economy Will Continue to Grow in the First Quarter of 2022

minister of Finance, Sri Mulyani

The Minister of Finance of Indonesia, Sri Mulyani Indrawati, estimates that Indonesia’s economic growth will grow to 4.5-5.2 percent in the first quarter of 2022.

Sri Mulyani said that this April the Organization for Economic Cooperation and Development (OECD), the World Bank, and the International Monetary Fund (IMF) would submit a revised global economic outlook due to the war between Russia and Ukraine.

“The Ministry of Finance in Q1 will certainly look at all indicators in March, but we are still in the range between 4.5-5.2 percent for the first quarter of 2022, and for the whole year we are still at 4.8-5.5 percent,” he said. Sri Mulyani Indrawati in a press conference on the results of the 2022 KSSK II Periodic Meeting, Wednesday (13/4/2022).

Previously, the OECD projected global economic growth in 2022 to be at 4.5 percent but has the potential to drop to 3.5 percent amid pressure from the war between Russia and Ukraine.

Then for the Asia Pacific region, the World Bank had predicted economic growth to grow 5.4 percent, but they lowered the prediction to the range of 4-5 percent in April 2022.

Furthermore, Sri Mulyani is optimistic that Indonesia’s economic growth will remain strong, which is supported by household consumption, investment activities, and support for government spending.

Nevertheless, the government remains wary of the developments in global economic trade and global economic growth which are threatened by the war in Ukraine.

With the increasing uncertainty of global financial markets and the inflow of foreign capital into domestic financial markets that are under pressure, portfolio investment experienced a net outflow of USD 1.3 billion as of March 31, 2022.

“This net outflow pressure when compared to other emerging markets which also experienced net outflows is still relatively lower or better,” said Sri Mulyani.

For this reason, Sri continued, Indonesia’s foreign exchange reserves in March 2022 remained at a high level, reaching USD 139.1 billion. This is equivalent to financing 7.2 months for imports or 7.0 months for imports and financing the government’s foreign debt.

“This standard is above the international adequacy standard, which is usually around 3 months of import needs. So, it is more than 2 times the international adequacy standard,” said Sri Mulyani.