This optimism is based on the province's economic growth in 2022, which showed a positive growth of 5.45 percent and exceeded national economic growth of 5.31 percent, head of BI’s West Java Representative Office, Erwin Gunawan Hutapea, informed.
"That West Java's economic growth is supported by positive performance of household consumption owing to relaxed restrictions on community activities, supported by export and investment performance," he said.
However, West Java still has some challenges that could compromise economic growth, such as geopolitical turmoil, he added. Another challenge is regional inflation control, which could be compromised considering the prediction of a bad drought in 2023.
He said that in order to face these challenges, synergy and collaboration, especially in the region's financial services, must be improved to support stability and increase economic growth.
West Java's economic growth in 2022 could support economic growth in Java and the nation as it exceeded the average national rate, Hutapea added.
Moreover, it was also supported by investment performance in West Java, which was the highest in Indonesia, with realization reaching Rp174.58 trillion (US$11.5 billion). It was coupled with good performance in the manufacturing and trade industry sectors, which continued to grow as domestic demand remained strong.
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In the future, BI's policy mix will focus on maintaining stability and promoting economic growth through pro-stability monetary policies as well as pro-growth macroprudential policies, financial market development, and green inclusive financial economy and payment systems, he highlighted.
He made some recommendations for maintaining regional economic recovery, such as keeping an eye on inflation rates and the supply of goods through market operation programs and inter-regional cooperation (KAD); maintaining people's purchasing power, including of farmers, by supporting financing, facilitation, and social security programs.
He also called for investment, particularly in infrastructure development, maintaining industrial performance, especially in labor-intensive industries as a source of economic growth, and addressing unemployment by creating jobs.
Hutapea also underlined the need for finding new sources of economic growth by tapping into MSMEs’ potential and sharia economy through financial sector financing, especially banking, which is supported by a credit guarantee program.
Bank Indonesia West Java and the regional Financial Services Authority will continue to collaborate in order to maintain financial system stability to support the regional economy.
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Translator: Ajat Sudrajat, Mecca Yumna
Editor: Yuni Arisandy Sinaga
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