Economist Predicts Indonesia's Economic Growth at 4.7% in 2022; Inflation 2.8%

TEMPO.CO, Jakarta - Bank Permata chief economist Josua Pardede estimates Indonesia's economic growth at around 4.7 percent in 2022. He also projects the inflation rate at a range of 2.5-2.8 percent.

Speaking at his bank's Economic Outlook web seminar Jakarta, Wednesday, Joshua said that 2022's economic growth rates depend on how fast the government can implement the Job Creation Law. If the government can bring investments faster, Josua said, the economy would be able to grow at a rate of 5 percent.

Joshua also predicts the BI 7 Days Repo Rate at 3.75 percent.

"With expectations of a higher inflation, Bank Indonesia has the potential to consider raising interest rates by 25 basis points at the end of next year. However, BI may decide to keep its current interest rate policy if inflation and the rupiah [exchange rate] are under control," he said.

He predicts the rupiah will weaken slightly next year, due to the US tapering policy and high tax rates.

"A stronger increase in the US dollar will quell the performances of industries that rely on raw material imports, with products targeted at the domestic market," he said.

Josua hopes that by 2022 all industry sectors will begin to recover along with the improving domestic economy, declining Covid-19 infections in many countries, as well as eased lockdowns and public movement restrictions.

Read: Sri Mulyani: IMF, OECD's Projections on Indonesia's Economic Growth Too Low

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