Jakarta: LPEM FEB University of Indonesia estimates that Indonesia's economic growth in the first quarter of 2022 is around 4.85 percent. Economic growth in the first three months of this year is predicted between 4.75 percent to 4.95 percent with overall projections of the year of five percent.
Apart from the disruption due to the Omicron variant in early 2022, Macroeconomic Economist and LPEM Financial Market FEB UI Teuku Riefky said that the economic performance in the first quarter of 2022 still showed the growth of economic activity and good performance from the trade balance.
"GDP growth in the first quarter of 2022 is estimated around 4.85 percent. Apart from various challenges, we still have the view of economic growth for the whole 2022 will return to the pre-Pandemic level in the range of five percent," he said in a written statement, Friday, May 6, 2022.
Entering 2022, Indonesia faces various domestic and foreign challenges. The combination of internal and external pressure has triggered the risk of inflation in the midst of economic recovery. Pull factors in terms of demand have encouraged the increase in purchasing power along with increased production activities, community mobility, and the rupture of the Pent-Up Demand.
"On the other hand, the push factor from increasing the price of raw materials suppresses the purchasing power of the people. Although it has not been presented at the inflation rate so far, inflationary pressure has been seen from these two factors," he said.
In terms of investment, the realization of investment was recorded at Rp282.4 trillion during the first quarter of 2022 or an increase of 28.5 percent (year on year), reaching the highest level in the past ten years. Foreign Investment (PMA) grew 31.8 percent to Rp147.2 trillion, mostly driven by the base metal sector, metal products, and equipment processing.
"On the other hand, domestic investment (PMDN) was recorded at Rp135.2 trillion or grew by 25.1 percent which was contributed by the transportation, warehousing and telecommunications sectors," he said.
Although the volume of global trade has declined in the impact of the implementation of sanctions by European Union countries and the United States (US) due to the Russian-Ukraine War, the surge in commodity prices has a positive impact on the Indonesian trade balance, which recorded a surplus of USD9.33 billion in the first quarter- 2022.
"The surplus is 20 percent higher than the same period in the previous year. This surplus is driven by commodity prices, especially coal and CPO. The combination of trade surplus and the existence of entry capital currents encourages the stable rupiah exchange rate," he concluded.
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