The current world economic situation is not good because it is still vulnerable to various risks (downside risks), such as inflation and interest rates which are still high. However, this difficult condition is also a signal for all countries to prepare and strengthen future synergies. In the midst of being exposed to various global challenges, the Government of Indonesia has succeeded in ensuring that the economic recovery continues, while maintaining an effective handling of the pandemic from a health perspective, one of which is through the PC-PEN constructive policy.
“When the Covid-19 pandemic occurred in 2020, the cabinet was only 3 months old, so this was a big challenge because there were no books or references on how to deal with it. At that time it was like there was no light in the tunnel to the point that we couldn't see the end. The Indonesian government took a different path, not through a lockdown because Indonesia's economic conditions are different from other countries, but through a 'gas and brake' policy that balances life and livelihood," said the Coordinating Minister for the Economy Airlangga Hartarto when delivering a keynote speech representing the President of the Republic of Indonesia in H1 Global Research Briefing – 2023 Global & Indonesia Outlook, in Jakarta, Tuesday (14/02).
As a result, the Indonesian economy remains resilient in the midst of a global economy that continues to experience periods of ups and downs. Indonesia's economic growth in Quarter IV-2022 was able to grow by 5.01% (yoy), so that in 2022 it could grow solidly by 5.31% (ctc). GDP growth in 2022 reached 5.31% (yoy), mainly driven by export performance which grew 14.92% (yoy), private consumption rose 4.48% (yoy), and also investment increased 3.33% (yoy).
Several real sector indicators released in January 2023 show optimism for consumer and world confidence going forward, for example the Consumer Confidence Index (IKK) is still moving at an optimistic level of 123.0 and the Manufacturing PMI is still at an expansive level of 51.3. Meanwhile, inflation as of December 2022 was under control at 5.51% following the adjustment of the fuel subsidy in September 2022.
"In parallel, Indonesia is carrying out economic transformation through the Job Creation Law, whereas no other country has done it. Currently the business environment is based on the Job Creation Law. This law is a breakthrough that will be able to hold the national economy (staying on track) and provide certainty to business people," said the Coordinating Minister for Airlangga.
In 2023, conditions of global volatility will continue, for example from commodity prices, inflation, tighter monetary policies, economic recovery in Asia, and global geopolitical conflicts (Russia-Ukraine war). Indonesia's own economic performance is expected to moderate throughout 2023 with predicted growth at the end of the year between 4.7% -5.0%.
The government's steps to face this year are filled with optimism but remain vigilant. The government has prepared a number of key policies, for example the right mix of fiscal and monetary policies, the Financial Sector Development and Strengthening Law (P2SK), and the Job Creation Perppu. This is the pillar of creating adequate economic growth and employment, as well as maintaining financial and exchange rate stability.
“Seminars like this are good for generating confidence from customers and investors. Moreover, to invest in the green economy, it is better to start now, and if not now, then there will be no more opportunities. For example, Indonesia has a lot of potential in carbon capture. Currently, the mood of investors has started to return to Indonesia. Apart from that, the Government is also making arrangements for Export Proceeds (DHE) so that it can be stored for at least three months domestically, so that in the future Indonesia will have the power to finance the economy (from there)," concluded the Coordinating Minister for Airlangga.
