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Overtaking European Countries, Indonesia’s Seventh Best Economy in the World

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By: Ahmad Dzul Ilmi Muis)*

Being able to overtake continental European countries, Indonesia’s economy is in the seventh best position in the world. There are many indicators that show that this nation’s economy has very strong fundamentals, so it seems that it is not too affected by the threat of the global economic crisis.

As data compiled by the IMF’s World Economic Outlook in the October 2022 edition, Indonesia’s gross domestic product (GDP) is able to reach 4.02 trillion US dollars. This figure was obtained based on the Purchasing Power Parity (PPP) approach . It should be noted that this PPP approach is a comparison of the value of a currency which is determined from how the purchasing power of that money is for goods and services in each country.

With a GDP figure of 4.02 trillion US Dollars, Indonesia’s position as recorded by the International Monetary Fund or IMF is included in the group of 10 countries in the world. Its exact position is in seventh place as the country with the largest GDP in the world, even surpassing other countries such as Brazil, England and France.

Brazil’s own GDP turned out to be only 3.78 trillion US dollars, then for the UK it was at 3.77 trillion US dollars and France reached 3.68 US dollars. In sixth place, which is exactly one level above Indonesia, Russia is occupied by having a GDP of 4.46 trillion US dollars.

Furthermore, regarding the report released by the IMF as a whole, the first position is owned by China with a GDP of up to 30.07 trillion US dollars, followed by the United States which has a GDP of up to 25.03 trillion US dollars. The third position is India with 11.66 trillion US dollars, Japan 6.11 trillion US dollars and Germany which has a GDP value of 5.3 trillion US dollars.

Indonesia’s ranking itself is in the seventh largest position in the world, then according to IMF Managing Director, Kristalina Georgieva, the position held by this nation is still quite promising, even though many experts say that the global economy will experience a slowdown.

Even Kirstalina herself stated that Indonesia seemed to be a country that became a bright spot in the midst of deteriorating world economic conditions. The IMF has a prediction regarding the country’s economic growth at least this year, the account managed to break through the 5 percent mark, which is 5.3 percent to be exact and if indeed in 2023 there is a crisis or a threat of recession, the slowdown will still occur, but make this figure a was at 5 percent only.

In line with the report and prediction, the Coordinating Minister for Economic Affairs, Airlangga Hartarto also revealed that the nation’s economy will remain strong until the end of 2022. Not without reason, but this statement is also supported by many other indicators that continue to show improvement even in the third quarter. . For information, the realization of economic growth that was achieved by Indonesia itself for two consecutive quarters was able to penetrate 5 percent.

It is clear that Indonesia’s economic growth rate, as predicted by the IMF, has far exceeded those of other countries in the world. The reason is according to the IMF, at least these countries are only projected to have global economic growth in 2023 at 2.9 percent and again trimmed to only 2.7 percent.

When compared with nearby countries, Indonesia’s economic prospects are also much better, namely Malaysia alone has an economic prospect that is estimated to be able to grow around 4.4 percent, while for Thailand it is only 3.7 percent, Singapore is at 2.3. percent and the Philippines can afford at 5 percent. There are two other countries that are able to compete with Indonesia, namely Vietnam and Cambodia which have an estimated economic growth of up to 6.2 percent.

It is undeniable that many economists have described that in 2023 the world will indeed experience economic bottlenecks. At least it certainly doesn’t happen right away.

At least there are several things that can influence why global economic obstacles can occur in 2023. The first thing is regarding inflation, which so far continues to creep up and spread, which automatically causes the cost of living crisis to occur.

Then the second thing is of course still related to the prolonged impact of the geopolitical conflict that caused the Russian invasion of Ukraine so that there was an energy crisis in the world because these two countries are indeed one of the largest energy producing countries in the world.

Meanwhile, the third thing is that there is also an economic slowdown in China, which as is well known, China is the top country with the highest GDP in the world, according to the IMF data. When the country at the top of the standings is also experiencing an economic slowdown, it is actually quite representative of the condition of the world economy.

If monitored in another way, actually the IMF itself also saw that a third of the world’s economy controlled by 31 countries would also experience an economic contraction, even if it happened in a row. Suddenly, many economists declared that the condition was an economic recession.

It is undeniable that Indonesia’s economic fundamentals are very good. Although the world is being hit by an economic crisis, in fact many indicators show that Indonesia can still be said to be one of the best in the world, even being able to overtake several European countries to occupy the seventh best position in the world.

)* The author is an Alumni of Airlangga University

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