"I want to emphasize that efforts to recover our national economy should be carried out with continuous collaboration between the private sector and the government, including also in obtaining international support," he said while delivering a keynote speech at the virtual US-Indonesia Investment Summit 2021 on Monday.
According to Hartarto, the controlled pandemic situation in Indonesia has brought optimism and confidence to the community and the business world. The economic recovery, which had slowed down in the third quarter of 2021 due to the Delta wave, managed to show improvement in the fourth quarter of 2021, he noted.
“Various main economic indicators showed a positive trend. The consumer confidence index in October 2021 reached 118.5, which indicated the recovery of confidence from the demand side. The Purchasing Managers' Index (PMI) reached 53.9 and showed improvement on the supply side," Hartarto elaborated.
Various leading indicators of the external sector have shown good resilience until the end of November 2021, he said. This can be seen in the relatively stable position of Indonesia's Foreign Exchange Reserves and Trade Balance, which has increased since 2019, while the Indonesian Composite Index (IHSG) and exchange rates have recorded fluctuating trends but are still showing improvement, he added.
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These improvements have boosted hopes that Indonesia's economic growth in the fourth quarter of 2021 would reach more than 5 percent and the nation would achieve sustainable economic growth in the future, the minister said. Indonesia's economic growth is projected to reach 5.2 percent in 2022, he added.
Meanwhile, the digital economy in Indonesia has also continued to increase, Hartarto said. In 2020, as much as 41.9 percent of the total ASEAN digital economy transactions came from Indonesia, which were contributed by the e-commerce sector, he said.
Indonesia's total digital economy transactions have reached US$44 billion in 2020 and are expected to increase to US$124 billion by 2025, he added.
E-commerce transactions, digital banking, and electronic money are also predicted to continue to increase this year, he said. The largest increase of 48.4 percent (yoy) is expected in e-commerce transactions, he noted. Electronic money and digital banking are projected to increase by 35.7 percent (yoy) and 30.1 percent (yoy), he added.
"This increase in digital transactions has a crucial role and contributes to Indonesia's economic recovery during the COVID-19 pandemic," Hartarto said.
Governor of Bank Indonesia (BI), Perry Warjiyo, had earlier forecast better prospects for an economic recovery in 2022 as compared to 2021, with growth projected at 4.7–5.5 percent.
"Our economy will be better while heading towards recovery, with growth in the range of 4.7–5.5 percent in 2022, from this year's 3.2–4 percent," Warjiyo said.
According to Warjiyo, the optimism of recovery must be strengthened by applying the precautionary principle. Growth must be supported by development in the consumption, investment, and export sectors as well as controlled inflation at three percent, give or take one percent, he added.
"The digital economy and finance will continue to increase very quickly to support our economic recovery," he affirmed.
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Translator: Kuntum K, Azis Kurmala
Editor: Suharto
Copyright © ANTARA 2021
