Bank Permata economists believe that the current condition of the Indonesian economy has shown a recovery, and has even surpassed pre-COVID-19 conditions or in 2019. However, Bank Permata chief economist Josua Pardede warned that the economic recovery that has occurred has not been evenly distributed both in terms of expenditure and business fields "From the consumption side, there are some sections of society that have not returned to normal. In terms of business fields, not all sectors have recovered. We take the example of the manufacturing sector, there are some sub-sectors that have negative growth, such as the textile sector," said Josua
Joshua also saw that this was a challenge for Indonesia to make economic recovery evenly distributed across all sectors. He also hopes that by 2022, the economic recovery will begin to spread evenly.
However, he also noted the risks looming over the progress of the economic recovery going forward.
Joshua detailed, first, that the risk came from the rising inflation rate due to the wars between Russia and Ukraine. The war between the two countries has the potential to increase energy prices and global inflation, including Indonesia. This will then increase input costs in most sectors of the economy so that it can have an impact on public consumption.
Second, there is a tightening of central bank monetary policy in developed countries in the world, which was then responded by Bank Indonesia (BI) by raising the benchmark interest rate.
This tightening of monetary policy will have an impact on the real sector, because there is a potential for an increase in borrowing costs. However, this will not be as big as an increase in the benchmark interest rate.
Third, normalize government spending. Thus, there could be a reduction in the share of government spending on Gross Domestic Product (GDP).
“In this case, is there a GDP component that can then limit the slope of government spending? For example, can the investment be covered? This needs to be looked at," he said.
With these conditions, Josua is still optimistic that economic growth in 2022 will be in the range of 4.8% yoy to 5.0% yoy. This is still higher than the economic growth in 2021 which was 3.69% yoy.
