Jakarta –
Bank Indonesia (BI) said that global economic growth has the potential to be better than forecasts. This is due to the abolition of the Zero Covid Policy in China.
BI Governor Perry Warjiyo said BI estimates global economic growth has the potential to be higher than the previous forecast of 2.3%.
“China’s economic growth has the potential to be higher with increasing domestic demand in line with China’s economic opening after the abolition of the Zero Covid Policy,” he said in a press conference, Thursday (16/2/2023).
He said the economies of the United States (US) and Europe are expected to slow down with the risk of recession still high.
Meanwhile, global inflation declined gradually due to the slowdown in global economic growth and improvement in supply chain disruptions, although it remained at a high level as energy and food prices have not fallen significantly and the labor market, especially in the US and Europe, is still tight.
Sluggish inflation is expected to push tight monetary policy in developed countries to its peak, with interest rates predicted to remain high throughout 2023.
Uncertainty on global financial markets also eased, resulting in increased global capital flows to developing countries. “Exchange rate depreciation pressure in these countries has lessened,” he said.
Indonesia’s economic growth in the fourth quarter of 2022 was recorded at a high rate of 5.01% (yoy) so that overall in 2022 it was recorded at 5.31% (yoy), a far increase from the previous year’s achievement of 3.70% (yoy).
Spatially, strong national economic growth in 2022 will occur in all regions, with the highest growth recorded in the Sulawesi-Maluku-Papua (Sulampua) region, followed by Java, Bali-Nusa Tenggara (Balinusra), Kalimantan and Sumatra.
For 2023, BI predicts economic growth will tend to be biased upwards in the range of 4.5-5.3%. Export performance has the potential to be higher than previously forecast driven by the positive influence of China’s economic recovery.
High growth is forecasted for household consumption due to increased confidence in economic actors and increased social mobility following the repeal of the Imposition of Restrictions on Community Activities (PPKM) policy.
“Investment has improved driven by improved business prospects, increased inflows of Foreign Investment (PMA), and the completion of the National Strategic Project (PSN) which continues,” he said.
Watch Video “End of Zero Covid in China“
(kil/zlf)
