The Year of Politics, Airlangga is Optimistic that Indonesia’s Economy Grows Above Five Percent

Armfalcon.com, JAKARTA — The government is optimistic that Indonesia’s economy will grow by 5.3 percent in 2023. This is driven by economic indicators which are still growing.

Coordinating Minister for the Economy Airlangga Hartarto said Indonesia’s economic performance continued to experience an increasing trend. In fact, for six consecutive quarters, Indonesia’s economy was above five percent.

“We hope that the development target at the end of this political year can reach 5.3 percent. We are optimistic that this growth can be maintained in 2023 and become momentum in 2024,” he said during a press conference, Friday (5/5/2023).

According to Airlangga, the economic prospects will remain strong, supported by several positive economic indicators, such as the consumer confidence index which is still above 100. This shows public optimism of 123.3 as of March 2023, higher than February 2023 with 122.4, even from January. 2023 of 123.0.

Meanwhile on a quarterly basis, the consumer confidence index for the first quarter of 2023 was at 122.9, compared to 119.7 in the fourth quarter of 2022. Indonesia’s Manufacturing PMI also rose to a level of 52.7 as of April 2023 from the previous 51.9.

From the external sector, the current account surplus and foreign exchange reserves continued to rise to US$145.2 billion. Then bond yields slumped and the rupiah exchange rate and the composite stock price index continued to strengthen and the ratio of debt to gross domestic product was at a safe level.

“We have also succeeded in reducing annual inflation to 4.33 percent in April, down from 4.97 percent in March. Of course the movement of the Central Inflation Control Team (TPIP) which was carried out with BI gave positive results, especially during Ramadan and Eid al-Fitr,” he said.

In order to achieve the economic growth target of 5.3 percent in 2023, Airlangga said that in the short term the government is making revisions to keep the foreign exchange earned from exports in the country.

“We need this rule because the United States is still increasing its benchmark interest rate. If we don’t take that step, it could potentially happen capital flights which has an impact on rupiah stability, so that the DHE regulation will be launched in the near future,” he said.