Minister of Finance Sri Mulyani Indrawati stated that the Indonesian economy has returned to the pre-COVID level based on the aspects of the gross domestic product (GDP) and state budget deficit.
BPS explained that the main driver of economic growth in Java is the industrial sector with a share of 1.9 percent and trade by 0.94 percent.
Economic growth is down but inflation is rising, the prices of all goods are going up. This is a condition I can really convey to the world in a dire condition
ADB Raises Indonesia's Economic Growth Projection to 5.2 Percent
TheIndonesia.id - The Asian Development Bank (ADB) raised its projection for Indonesia's economic growth to 5.2 percent in 2022 thanks to the domestic good demand and stable export growth. The revised projection is provided in the recently released Asian Development Outlook (ADO) Supplement, up from ADB's previous forecast in April of 5 percent.
"Economic activity in Indonesia continues to return to normal, while COVID-19 infections are still under control, despite the recent increase in the number of cases," said ADB Director for Indonesia Jiro Tominaga in a statement quoted by Antara in Jakarta, Thursday, July 21, 2022.
The revised growth forecast in the ADO Supplement is also in line with the rising growth projections for Southeast Asia. For the region, ADB projects 5 percent growth in 2022, up from April's projection of 4.9 percent. The report also estimates that inflation in Indonesia will be higher by 4 percent by the end of 2022 compared to ADB's projection of 3.6 percent in April 2022, due to high commodity prices.
"Inflation increases lower household purchasing power, but high prices for a number of key export commodities have benefited from export earnings and fiscal revenues, allowing the government to provide assistance amid rising food, electricity and fuel prices, while still reducing the budget deficit," said Tominaga.
Meanwhile, for 2023, the ADB projects that the Indonesian economy will grow steadily at 5.3 percent and inflation may fall again in the range of 3.3 percent.