Booster for RI's economy
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Booster ekonomi RI
2 January 2023
By: Tegar Arief
Starting the fiscal consolidation year, the government immediately revs up the economic machine. Besides taking advantage of the consumption surge momentum from Christmas and New Year’s, several new policies were also launched to stimulate the national economy that is set to grow 5.3% this year.
Some of the new policies include lifting public activity restrictions (PPKM) and issuing Government Regulation in Lieu of Law No. 2/2022 on Job Creation.
Several parties are optimistic about the PPKM lifting boosting the people’s consumption and creating stability between offer and demand. Moreover, President Joko Widodo affirmed that social aids would still be provided despite the PPKM being lifted.
This is supported by the 2023 state budget (APBN) that still accommodates the social aid program. Moreover, several programs from National Economic Recovery (PEN) are also adopted as regular programs of ministries and institutions.
Moreover, the redesign of Law No. 11/2020 on Job Creation can become a tool for the government to obtain investments that are set to reach Rp1,400 trillion this year.
Coordinating Minister for Economic Affairs Airlangga Hartarto is optimistic about the regulation accompanying the strategy in the consumption sector so that economy grows solidly.
Several strategic steps of the government to face economic challenges in 2023 are quite logical as consumption and investment are two of the largest components that contribute to the gross domestic product (GDP). The contributions of both are important pillars amid the fiscal consolidation mandate that will return budget deficit to be under 3%.
Moreover, the government is balancing the economic strategy by focusing on the health aspect.
Regional Administrative Development Director General of the Home Affairs Ministry, Safrizal, said that, by lifting PPKM, all economic players needed to be observant to secure the transition from pandemic to endemic.
He is also asking all regional governments to collaborate by maintaining the operation of the Covid-19 Task Force.
Generally, business players are positively responding the government’s policy. However, businesses also need to observe the impact of global recession on the country.
Indonesian Employers Association (Apindo) Economic Policy Analyst Committee Chairperson Ajib Hamdani explained that there were three factors that could be the foundation for building optimism this year.
The factors include high population that tightly correlates to consumption rate, natural resources potential, and MSME (micro, small, and medium enterprise) existence.
However, Ajib also said that there were issues that needed to be mitigated, such as weakening purchasing power, inflation surge, unemployment rate increase, and benchmark interest rate increase.
“Interest rate will boost cost of fund that is an important part of basic sales price,” he said to Bisnis on Sunday (1/1).
