Bank Indonesia Predicts 4.5 to 5.3% Economic Growth in 2022

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Laila Afifa

24 June 2022 06:04 WIB

TEMPO.CO, JakartaBank Indonesia (BI) projected the country's economic growth to range between 4.5 and 5.3 percent in 2022. The central bank's governor, Perry Warjiyo, said the forecast is in line with the ongoing domestic economic improvement, supported by increased mobility, sources of financing, and growing business activities.

"With these developments, 2022's economic growth is predicted to stay within Bank Indonesia's projection at a range of 4.5 to 5.3 percent," Perry said in a written statement, Thursday, June 23.

He said the domestic economy continued to improve along with increasing demand amidst positive export performances. This is reflected in various early indicators in May 2022 and the results of BI's surveys. 

Surveys revealed that domestic demand—such as consumer confidence, retail sales, and the manufacturing purchasing managers' index (PMI)—have improved, driven by increased mobility and financing from banks.

The export performance also remained strong, particularly for coal, steel, and metal ores, amid risks of stifled demand due to the global economic slowdown. The positive export performance occurred in all islands, especially Kalimantan and Sumatra.

"Economic improvement is also indicated by the improving performances of several key sectors like manufacturing, trade, and construction industries," he said.

The central bank held its board of governors meeting on June 22 and 23. The meeting resulted in a decision to keep the 7-Day Reverse Repo Rate (BI7DRR) at 3.50 percent, the Deposit Facility rate at 2.75 percent, and the Lending Facility rate at 4.25 percent.

Perry said that the decision was made to support the national economic growth amid increasing external pressures. Indonesia, he said, is facing an increasing risk of stagflation in various countries.

Muhammad Hendartyo

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