Indonesia's economic growth to remain strong in 2023: BI

Indonesia's economic growth to remain strong in 2023: BI

Screenshot—Executive director and head of Bank Indonesia’s communication department, Erwin Haryono, has said that Indonesia’s economic growth will remain strong in the range of 4.5–5.3 percent this year. (ANTARA/Agatha Olivia/pri)

Jakarta (ANTARA) - Bank Indonesia (BI) has projected that Indonesia’s economic growth will remain strong in the range of 4.5–5.3 percent this year, given the nation’s economic performance in 2022, which improved compared to 2021.

In an official statement issued in Jakarta on Thursday, Executive Director of the BI’s Communications Department Erwin Haryono said that economic growth in 2023 will be driven by increased domestic demand for both household consumption and investment.

The prediction is in line with the increase in community mobility after the revocation of the community activity (PPKM) restrictions policy, improved business prospects, increased inflows of foreign investment (PMA), and continued completion of national strategic projects (PSN).

Data from the Central Statistics Agency (BPS) has shown that in the fourth quarter of 2022, Indonesia's economic growth remained high at 5.01 percent year on year (yoy) amidst slowing global economic growth.

With these developments, Indonesia's overall growth in 2022 was recorded at 5.31 percent yoy, a steep increase from 3.70 percent yoy the previous year.

The strong economic growth was supported by almost all components of the gross domestic product (GDP) from the expenditure side.

Meanwhile, household consumption grew 4.48 percent yoy, in keeping with increased mobility of the people, including Christmas and New Year activities, as well as continued distribution of social assistance.

Exports continued to grow at 14.93 percent yoy, driven by strong demand from major trading partners.

Non-construction investment growth also remained high, tracking export performance, although overall investment growth was slightly restrained at 3.33 percent yoy due to low construction investment.

Meanwhile, government consumption contracted by 4.77 percent yoy, but this was influenced more by a decline in spending on goods for handling COVID-19 and national economic recovery (PC-PEN), in line with the pandemic situation, which continued to improve.

The strong economic growth was also reflected in the field of business as well as spatially. In the fourth quarter of 2022, all sectors showed positive performance, mainly supported by the processing industry, wholesale and retail trade, as well as information and communication.

The transportation and warehousing sector as well as the accommodation and food and drink sectors also recorded high growth on the back of continued increases in people's mobility and increased visits by foreign and domestic tourists.

Spatially, economic growth in the fourth quarter of 2022 was recorded as strong in all regions of Indonesia, although there were some areas that showed signs of slowing down.

The highest economic growth was reported in the Sulawesi-Maluku-Papua region, followed by Bali-Nusa Tenggara, Kalimantan, Sumatra, and Java. 

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