This is what we will see in 2023, whether investment growth can be maintained at above 5 percent, because last time, in the third quarter of 2022, it had grown 4.9 percent. That is very close to 5 percentJakarta (ANTARA) - The government is hoping that the investment rate can be maintained above 5 percent in 2023 to ensure strong national economic resilience amid rising global interest rates due to inflation, Finance Minister Sri Mulyani Indrawati said.
"This is what we will see in 2023, whether investment growth can be maintained at above 5 percent, because last time, in the third quarter of 2022, it had grown 4.9 percent. That is very close to 5 percent," Indrawati said at the “Kompas100 CEO Forum 2022,” which was followed from here on Friday.
Amid rising economic uncertainty and inflationary pressures, Bank Indonesia (BI), like other central banks globally, has been forced to adjust its key rates. BI has so far raised its benchmark interest rate by up to 175 basis points (bps).
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She said that the increase in global and domestic benchmark interest rates would affect the economy for sure, especially next year, because BI has only raised its benchmark interest rate toward the end of this year.
Therefore, this phenomenon will be monitored further to gauge national investment resilience, because sooner or later, the increase in the benchmark interest rate will transmit to bank interest rates.
Rising bank interest rates will certainly affect entrepreneurs' intentions to expand their businesses because interest rates on loans will start to climb.
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"Fellows of banking will see whether credit growth to the business world will remain or not. Will companies continue to make initial public offerings so that investment and investment will continue," she said.
Indrawati said that a growth of above 5 percent in consumption, which accounts for up to 57 percent of the gross domestic product (GDP), would also need to be maintained to face the global turmoil next year. Therefore, the government has continued to make efforts to maintain the people's purchasing power amid rising inflation.
Exports, which have grown significantly this year, will also be improved next year because of the risk of global recession, which is likely to depress commodity prices and export demand compared to this year.
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Translator: Agatha O V, Mecca Yumna
Editor: Fardah Assegaf
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