Indonesia's Economy Can Exceed 5% in 2023, Here's the Proof

Jakarta: Chief Economist for Citi Indonesia Helmi Arman predicts Indonesia's economic growth in 2023 will exceed five percent.
 
"Previously, we projected Indonesia's economic growth this year to be five percent or lower than five percent. Now we are sure that economic growth will be above five percent," said Helmi, quoted from Antara, Monday, May 15, 2023.
 
According to Helmi, this optimism departs from the structural economic reforms carried out by Indonesia. He explained that structural reforms to the Indonesian economy could provide cushion against shocks that came from outside and were still unstable.
This is reflected in Indonesia's economic growth in the first quarter of 2023 which reached 5.03 percent. Helmi highlighted the role of exports as one of the factors that strengthened Indonesia's economic growth during this period.

Exports for the first quarter of 2023

Based on data from the Central Statistics Agency (BPS), export performance grew by 11.68 percent, becoming the expenditure component that experienced the highest growth in the first quarter of 2023. The strengthening of export performance was mainly driven by increases in mineral fuels, animal/vegetable fats and oils, as well as iron and steel.
 
"Indeed, our exports in a number of sectors are facing challenges, because the world economy's growth is declining. However, thanks to the ongoing structural reforms in our country, this has provided a cushion against the decline in exports in other sectors," explained Helmi.

Household consumption

Apart from exports, the other main support for economic growth is household consumption with a growth of 4.54 percent. Helmi said that this achievement did not match the pre-pandemic figures, but he saw the potential for an increase in domestic demand in the future.
 
"We see that domestic demand still has the potential to provide a boost, because inflation has started to decline since a few months ago, of course this is in line with the decline in world commodity prices," said Helmi.
 
Apart from inflation, Helmi sees the tourism sector will also be a performance booster for domestic demand in the near future. (Kevin Omar Schreiber)