Sri Mulyani Says Indonesia’s Economy in the First Quarter of 2023 Exceeds China’s, Here’s the Reason

Armfalcon.com, JAKARTA— The government considers that strengthening public purchasing power is one of the important factors driving Indonesia’s economic growth performance in the first quarter of 2023 to exceed China’s economic performance in the same quarter.

The performance of economic growth in the first quarter of 2023 of 5.03 percent exceeded most of the predictions of market analysts.

The Minister of Finance, Sri Mulyani, said that this performance also exceeded China’s economic performance in the first quarter of 2023 by 4.5 percent.

This shows Indonesia’s resilience amidst the dynamics of the global economy which continues to slow down.

The supporting factors for resilience were mainly household consumption which grew 4.5 percent, higher than the performance in the first quarter of 2022 of 4.3 percent.

“This reflects the maintained strengthening of people’s purchasing power which is supported by price stability in the country and increasing people’s income in line with continuing job creation,” he said in an official statement, Saturday (5/5/2023).

He said the government would continue to monitor risks to the world economy. Even though Indonesia’s economic performance in the first quarter was quite good, global economic conditions were under pressure.

The International Monetary Fund estimates that the global economy will slow down from 3.4 percent in 2022 to 2.8 percent in 2023.

“The 2023 State Budget has been designed in a conservative and anticipatory manner against the global economic slowdown, including the propagating impact of moderating commodity prices,” he said.

On the other hand, fiscal policy is also aimed at accelerating the implementation of the structural reform agenda. Sri Mulyani said that the state revenue and expenditure budget plays a crucial role in reducing global inflationary pressures and encouraging the strengthening of domestic economic activity.

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“This can be seen, among others, from the consumption components of government consumption and state spending,” he said.

As of the first quarter of 2023, government consumption has grown by four percent. Then, components of the state revenue and expenditure budget that are included in government consumption, such as goods spending grew 36.4 percent and personnel spending grew 1.2 percent.

“State spending continues to be optimized to support the continuation of economic recovery and maintain people’s purchasing power through social assistance programs. This also shows that the fiscal consolidation carried out by the government in 2023 will not hold back the pace of accelerating national economic growth,” he said.