Jakarta: The government stated that it would remain alert and careful in responding to the latest developments in the world economy because it was considered to pose a real risk to the Indonesian economy.
"Our economy is still expansive, on the one hand we are still optimistic, but on the other hand we still have to be careful because the risks are quite real," Finance Minister Sri Mulyani Indrawati said at a joint working meeting with Commission XI DPR in Jakarta, reported by Media Indonesia, Tuesday, June 6, 2023.
One of the most obvious risks is the decline in Indonesia's export performance. The decline has occurred since the beginning of the year due to the normalization of the prices of a number of national superior commodities and world conditions which are still in uncertainty.
In April 2023, for example, Indonesia's export value of USD 19.29 billion decreased by 17.26 percent from the previous month's export value. In fact, these gains fell even deeper to 29.44 percent from April 2022.
The decline also occurred from the import side. In April 2023, Indonesia's import value was recorded at USD 15.35 billion, down 22.32 percent when compared to the April 2022 import value.
"Our exports and imports with a weakening global environment show a fairly deep contraction because indeed 2021-2022 are somewhat different years," explained the Minister of Finance.
"Our economy is still expansive, on the one hand we are still optimistic, but on the other hand we still have to be careful because the risks are quite real," Finance Minister Sri Mulyani Indrawati said at a joint working meeting with Commission XI DPR in Jakarta, reported by Media Indonesia, Tuesday, June 6, 2023.
One of the most obvious risks is the decline in Indonesia's export performance. The decline has occurred since the beginning of the year due to the normalization of the prices of a number of national superior commodities and world conditions which are still in uncertainty.
In April 2023, for example, Indonesia's export value of USD 19.29 billion decreased by 17.26 percent from the previous month's export value. In fact, these gains fell even deeper to 29.44 percent from April 2022.
The decline also occurred from the import side. In April 2023, Indonesia's import value was recorded at USD 15.35 billion, down 22.32 percent when compared to the April 2022 import value.
"Our exports and imports with a weakening global environment show a fairly deep contraction because indeed 2021-2022 are somewhat different years," explained the Minister of Finance.
Entrepreneurs' self-confidence is eroded
The decline in trade performance also impacted on the confidence of business actors in business prospects and the national economy. This is reflected in the Indonesian manufacturing purchasing manager's index (PMI), which fell to a level of 50.3 in May 2023. The manufacturing PMI position fell from the previous month which was recorded at 52.7.
"What we have to watch carefully is the PMI, which just came out at 50.3, weakened compared to last month which was above 52. However, (indeed) we are still expansive," he said.
Apart from looking at risks from external factors, continued the woman who is familiarly called Ani, Indonesia also has the capital to remain optimistic because several other economic indicators are still showing pretty good performance.
The consumer confidence index (IKK), for example, until April 2023 showed a strengthening trend to a level of 126.1. The IKK has been recorded to have continued to strengthen since February 2023.
On the same occasion, Governor of Bank Indonesia (BI) Perry Warjiyo said BI's policy mix would focus on maintaining stability and sustainable economic growth.
"We will continue to direct monetary policy towards maintaining stability, while other policies such as macroprudential, payment systems, market deepening, finance, inclusion and sustainable economics, as well as international policies, including Islamic economics and finance, will be directed towards sustainable growth," he said.
In terms of macroprudential policy, BI continues to adopt a lax policy of maintaining coordination with the Financial System Stability Committee (KSSK), including with the Financial Services Authority (OJK).
In the field of digitizing the payment system, BI is expanding digitization to strengthen the national digital financial ecosystem. This year, BI is focusing on developing the standard Indonesian quick response code (QRIS) to be used in all lines of business. (Kevin Schreiber)
"What we have to watch carefully is the PMI, which just came out at 50.3, weakened compared to last month which was above 52. However, (indeed) we are still expansive," he said.
Apart from looking at risks from external factors, continued the woman who is familiarly called Ani, Indonesia also has the capital to remain optimistic because several other economic indicators are still showing pretty good performance.
The consumer confidence index (IKK), for example, until April 2023 showed a strengthening trend to a level of 126.1. The IKK has been recorded to have continued to strengthen since February 2023.
On the same occasion, Governor of Bank Indonesia (BI) Perry Warjiyo said BI's policy mix would focus on maintaining stability and sustainable economic growth.
"We will continue to direct monetary policy towards maintaining stability, while other policies such as macroprudential, payment systems, market deepening, finance, inclusion and sustainable economics, as well as international policies, including Islamic economics and finance, will be directed towards sustainable growth," he said.
In terms of macroprudential policy, BI continues to adopt a lax policy of maintaining coordination with the Financial System Stability Committee (KSSK), including with the Financial Services Authority (OJK).
In the field of digitizing the payment system, BI is expanding digitization to strengthen the national digital financial ecosystem. This year, BI is focusing on developing the standard Indonesian quick response code (QRIS) to be used in all lines of business. (Kevin Schreiber)
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