Sri Mulyani: Indonesia’s Economic Growth May Fall Under 5.3%

TEMPO.COJakarta – Indonesia’s Finance Minister Sri Mulyani Indrawati said there was potential for a decline in the projected economic growth in 2023, which was initially pegged at 5.3 percent. Sri said this during a meeting with Commission XI of the House of Representatives on Wednesday, August 31.

“If we look at it carefully, in 2023 there is a tendency for a downward revision on the economic projection,” said Sri.

This, she said, is due to the hawkish policies of advanced nations’ central banks, which will continue to raise interest rates in 2023. The rate hikes are expected to strike a blow to economic growth and have the potential to hit Indonesia in terms of exports.

“And with that, of course, our exports, which could grow above 30 percent, may not be a baseline that will continue to happen,” the minister said.

Moreover, Sri said that the government is also very careful about public consumption, which may also experience a weakening impact due to rising prices. “These are new factors that we must take into account,” she said.

With economic growth of 5.3 percent, household consumption will remain above 5.0 percent. This, she added, is quite an optimistic assumption that still requires “calibration with caution”.

For this year, Indonesia’s economic growth is projected to remain stable at 5.2 percent until December. In Q3, Sri said, the economy is still expected to grow high due to the recovery pace, estimated above five percent.

“This is what we will seek to maintain until the fourth quarter,” Sri Mulyani said.

Muhammad Hendartyo