By: Hasan Zebua *
The country of Indonesia has managed to survive amid the huge global economic turmoil thanks to solid macroeconomic fundamentals and strong policy coordination, according to the December 2018 edition of the Indonesian economy quarterly released by the World Bank last February 2019. With monetary and fiscal policies that can maintain macroeconomic stability, the Indonesian economy grew strongly by 5.2 percent in the third quarter, still higher than some neighboring countries such as Malaysia, Thailand and Singapore. Investment growth remains the main driver of the economy, with construction investment strengthening compared to the previous quarter.
Annual real GDP growth is projected to be 5.2 percent for 2018 and 2019, slightly higher than in 2017. Stronger domestic demand is still dominated by investment, and is expected to outweigh obstacles in the external sector, amid slowing global growth and continuing uncertainty about global trade policies. With this achievement it certainly indicates that Indonesia has a fairly stable economy so that it has resistance to global economic pressures. In addition to the policy steps by President Jokowi’s government which can be said to be right.
Of course the public must begin to filter information related to the Indonesian economy, so that it is not easily led in a misleading opinion. Given the spread of news that tends to hoax for political interests in cornering the government. Based on the release from the Central Statistics Agency (BPS) the 2018 figure is still higher than Indonesia’s economic growth in 2017 which was 5.07 percent. Coordinating Minister for Fields
Economy Darmin Nasution explained, the achievement of the growth rate this time should be grateful in the midst of quite a global challenge. He also said that the Indonesian economy has a resilience alias has resilience.
“Our economy is capable. Not just surviving, but able to grow. Slowly go up. Riding isn’t much, but it’s consistent (up), “Darmin said.
He also stated that Indonesia’s economic growth was also influenced by the composition of government spending over the past 5 years. While for 2019, Darmin said he was optimistic that Indonesia’s economy still had enough room to grow higher. The former Governor of Bank Indonesia (BI) even believes that the achievement of first quarter economic growth figures will be higher than in 2018. This was driven by the improvement in the rupiah exchange rate against the US dollar (US) which moved to the level of Rp. 13,000.
The strengthening of Indonesia’s economy is also reflected in low inflation of around 3.2 percent in 2018 and under control in accordance with the target of 3.5 plus minus 1 percent in 2019 to support people’s purchasing power. On another occasion, Minister of Finance Sri Mulyani Indrawati explained what her party and the ministries / institutions had related to what was done to maintain the resilience of the Indonesian economy amid global turmoil that caused uncertainty in the foreseeable future.
There is a particular focus that becomes a common concern to make Indonesia resistant to global dynamics but can still spur economic growth.
“So the biggest pressure from this global turmoil is investment, because the interest rate pressure will rise, the pressure of raw materials and imported capital goods increases,” said Sri Mulyani.
On the one hand, the government has a mission to increase investment with stimulus from various forms of incentives mixed by the government. However, the government is also interested in maintaining the current account deficit by controlling or reducing imports so that this year’s economic growth target can be achieved.
“If the investment has now grown to close to 8 percent, we hope that the momentum will stay close to 8 or above 8 percent. How to? Even though the interest rate rises, BI relaxes, “explained Sri Mulyani.
The purpose of relaxation is to boost credit demand while compensating for rising interest rates. Bank Indonesia previously raised its benchmark interest rate or BI 7-Day Repo Rate by 50 basis points (bps) to 5.25 percent. Even though the global economy is in turmoil, Indonesia is no less resourceful in developing various cross-sectoral strategies to maintain the strength of the Indonesian economy, of course the spirit of optimism must continue to be built in order to realize a strong national economy.
- The author is an observer of economic issues
