The turmoil in the global economy is showing signs of abating. This is an opportunity for the Indonesian economy in 2023.
Bank Mandiri Chief Economist Andry Asmoro estimates that Indonesia's economic growth in 2023 will be at the level of 5.04% YoY.
Andry said that Indonesia's economic growth in 2023 will remain strong, supported by the domestic sector. In this case, Andry hopes that household consumption growth, which is the driving force of the economy, will remain strong this year.
"Household consumption will be supported by controlled inflation and the repeal of the PPKM so as to increase mobility and public demand," Andry told Kontan.co.id, Monday (6/2).
Apart from growing household consumption, Andry is also pinning his hopes on government spending. In 2022, government spending will indeed experience a contraction amidst the declining National Economic Recovery Program (PEN) budget. However, in 2023 he hopes government consumption will return to positive. Moreover, there are preparations for the general election in early 2024. The formation of Gross Fixed Capital (PMTB) or investment is also expected to achieve a high performance this year. Andry estimates that the source of PMTB growth will shift from non-building and structural investment to building and structural investment.
This is supported by an increase in the infrastructure budget in the infrastructure budget in the 2023 State Budget (APBN) of around 7% YoY. Then, the government is also focusing on the development of the National Capital City (IKN) of the Archipelago, various National Strategic Projects (PSN), as well as downstreaming.
Furthermore, Andry also emphasized that this does not mean that the external sector will not contribute to Indonesia's economic growth this year. According to him, exports will still grow despite weakening.
"We estimate that export activity will weaken, in line with the global economic slowdown. Although, global economic uncertainty has shown signs of abating," explained Andry.
In addition, prices for Indonesia's mainstay of export commodities are also prone to decline amid prospects for increased supply and decreased demand in western countries. The good news is that the reopening of China's economy is considered capable of sustaining demand. Moreover, China is Indonesia's main trading partner.
