Kontan are reporting that Indonesia’s economic prospects this year appear to be better than expected. So, the Asian Development Bank (ADB) also raised its projection for Indonesia’s economic growth in 2023. ADB’s latest prediction is that Indonesia’s economic growth this year could reach 5.0-percent year-on-year, or higher than the previous estimate of 4.8-percent year-on-year.
ADB Senior Country Economist Henry Ma said the latest economic growth estimates were in line with the positive trends occurring in Indonesia.
“Various positive developments can be seen, especially from strong domestic demand,” explained Ma at the Asian Development Outlook September 2023 event, Wednesday (27/09/23).
Kontan report that Ma said household consumption growth has returned to pre-Covid-19 pandemic times. In fact, public consumption is truly evenly distributed across both demand for goods and services.
Domestic mobility is also good, especially after the government announced the Covid-19 pandemic. This step also invites foreign tourists.
“If you look at it, consumption of foreign tourists in Indonesia is increasing. It has even been above pre-Covid-19 pandemic,” added Ma.
However, Ma warned that slowing exports amidst increasing imports would be a stumbling block to higher economic growth.
The decline in exports was caused by the normalization of commodity prices and a potential decline in demand due to the global economic slowdown, say Kontan, adding that Ma sees there is still the potential for a trade balance surplus amidst these dynamics.
Looking ahead, Ma estimates that Indonesia’s economic growth in 2024 will be around 5.0-percent yoy. This is unchanged from the April 2023 estimate.