Indonesian Economy Doing Well amid Global Pressures: KSP

TEMPO.CO, Jakarta - The Indonesian economy is still in good condition despite the existing global tensions, Presidential Staff Office (KSP) expert Edy Priyono said on Sunday.

Priyono said in early 2022 some economic indicators remained strong, which was reflected in positive demand performance and production strength.

"This shows that consumer optimism towards the economy is maintained," Priyono pointed out.

According to him, the positive demand performance was reflected in the Consumer Confidence Index (CCI) which was at the level of 111 or the optimistic zone and was indicated by the Retail Sales Index which grew 8.6 percent (yoy) in March 2022.

The high growth in retail sales is important, considering that the main support for Indonesia's gross domestic product (GDP) is household consumption, he emphasized.

"The positive trend of retail sales index and CCI is expected to support economic growth in the first quarter of 2022," he explained.

Meanwhile, production strength can be seen in the confidence of business managers in the Indonesian manufacturing sector, which was still in the expansive zone at the level of 51.3 in March 2022, and consistently expanded for seven consecutive months, he said.

Furthermore, production strength was also assessed from the processing industry utilization, close to the pre-pandemic level, at 72.45 percent in 2022's first quarter.

"Thus, the risk of inflation in the future can be minimized," he explained.

Internally, he stated, the government has successfully handled and controlled COVID-19 and strived for the national economic recovery. While externally, he said, Indonesia benefits from export-leading commodities that provide fiscal support.

"The combination of these factors strengthened investor confidence in the Indonesian economy; the foreign direct investment (FDI) in the first quarter of 2022 grew significantly 31.8 percent (yoy)," he explained.

However, he stressed, Indonesia must remain vigilant of the sustained impacts of the war, rising commodity prices, COVID-19 pandemic conditions in China, and the potential decline in global economic growth.

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