Indonesia’s economy picks up pace of recovery

International Business News  –  Hartato, Minister of Economic Coordination of Indonesia, said recently that most industries in Indonesia are showing a growth momentum, benefiting from the stimulating effect of consumption, investment, export and other demand. The Indonesian government has the ability to achieve the expected economic growth target of 5% in the third quarter, and is expected to achieve the economic growth target of 5% to 5.2% in the whole of 2022. The latest data from the Indonesian Ministry of Finance shows that Indonesia’s fiscal revenue in the first half of 2022 increased by 48% year-on-year. The fiscal deficit outlook for 2022 has been reduced to 3.9% of GDP from 4.7% previously.

In order to alleviate the impact of the new crown pneumonia epidemic, the Indonesian government has continued to launch strong fiscal and monetary policies, including continuously increasing financial support for the national economic recovery plan, providing income tax exemptions, value-added tax and import tax rebates, and industry support programs for small and medium-sized enterprises. The Bank of Indonesia has also cut interest rates several times to promote the liquidity of the financial system, which has played a positive role in accelerating economic recovery and ensuring employment, and achieved remarkable results. Indonesia’s economy has emerged from recession last year, growing by 3.69% year-on-year.

At present, infrastructure construction is still the key area of ​​Indonesia’s economic recovery and development. Expert analysis shows that infrastructure investment in Indonesia will continue to maintain a high level in the medium and long term, which is expected to further release growth momentum. Indonesian Minister of Public Works and Housing Basuki said that Indonesia’s infrastructure construction gives priority to the needs of the people, focusing on projects such as dams, roads, irrigation areas, schools and sports facilities, tourist destinations, and comprehensive industrial areas.

Indonesia’s digital economy is accelerating and has become a major bright spot in the economic recovery process. The Indonesian government is vigorously promoting the use of digital services, such as telemedicine and tracking applications to help control outbreaks in the health care sector. The Indonesian government is working to accelerate the country’s digital transformation, covering five major priorities, including expanding high-speed Internet infrastructure to approximately 12,000 villages, building national data centers, supporting human resource development in the digital sector, providing e-commerce support for MSMEs and digital startups, and enacting personal data protection laws for e-commerce businesses.

The Indonesian government has also launched the “Made in Indonesia 4.0” program to improve the global competitiveness of domestic manufacturing. The Indonesian government has identified food and beverage, textile and apparel, automotive, and electronics as key sectors to be supported, and expects these sectors to increase economic growth by two percentage points per year by 2030, creating more than 10 million jobs by then.

The Indonesian government has also formulated comprehensive policies and measures to promote the development of the renewable energy industry, while promoting the application of new technologies and revitalizing high value-added industries in an effort to explore new economic growth points.

Yusuf Wanandi, senior researcher and co-founder of the Indonesian Center for Strategic and International Studies, told reporters that Indonesia’s economic growth prospects are promising. Indonesia has the advantage of commodity exports will continue to expand. The Regional Comprehensive Economic Partnership Agreement (RCEP) came into effect earlier this year and Indonesia is gradually enjoying the dividends. In addition, Indonesia is actively promoting its “global maritime pivot” concept to dovetail with the “Belt and Road” initiative, which will help continue to attract investment from China.