…for this year, we estimate economic growth, a current account surplus, and higher inflation for Indonesia compared to April 2022.
Jakarta (ANTARA) – Country Director of the Asian Development Bank (ADB) for Indonesia Jiro Tominaga has seen strong momentum for growth in Indonesia as a whole throughout this year.
“Indonesia’s prospects tend to be more positive than global or regional Asia,” Tominaga said at the “2022 Capital Market Summit and Expo (CMSE)” here on Friday.
Indonesia is already on a solid path of recovery from the COVID-19 pandemic. The great uncertainty for Indonesia that led to ADB lowering its projection in April 2022 was the result of a potential surge in infections caused by the Omicron variant, the impact of Russia’s invasion of Ukraine, and the volatility of the global economy as a whole.
However, since then, the COVID-19 recovery in Indonesia has been more or less stable, while domestic demand has remained strong, Tominaga observed.
On the export side, strong demand and high export prices for Indonesian commodities have boosted the value and volume of exports.
Meanwhile, the windfall in state revenues has allowed for larger subsidy spending and led to a smaller state budget (APBN) deficit.
According to Tominaga, there is indeed a risk of a decline in global growth and inflation, but this will not be felt by Indonesia until early next year.
“So, for this year, we estimate economic growth, a current account surplus, and higher inflation for Indonesia compared to April 2022,” he said.
The ADB has raised its projection for Indonesia’s economic growth in 2022 from 5.0 percent in April 2022 to 5.4 percent in September 2022, whereas for 2023, the projection has been lowered from 5.2 percent to 5.0 percent.
The domestic inflation forecast has been raised from 3.6 percent to 4.6 percent for 2022, while for 2023, it has been raised from 3.0 percent to 5.1 percent.
Meanwhile, for the current account, the surplus forecast has been raised from zero percent of the gross domestic product (GDP) to 0.5 percent of the GDP for 2022, and increased from a deficit of 0.5 percent of the GDP to zero percent of the GDP for 2023.
“For next year, we see Indonesia’s more moderate economic growth, a lower current account deficit, and higher inflation,” Tominaga said.