Indonesia recorded economic growth of below 5% in the third quarter of 2023. Minister of Finance (Menkeu), Sri Mulyani, revealed that this was caused by declining household consumption.
According to Sri Mulyani, consumption issued by BPS is relatively lower than the government’s expectations. He said the government saw that consumer confidence remained high in the third quarter.
“We see that consumer confidence is high, but the translation to consumption is not as high as we expected,” said Sri in a press conference at the Office of the Coordinating Ministry for the Economy, Central Jakarta, quoted on Saturday (11/10/2023).
Apart from that, Sri also touched on government consumption which was recorded as negative. He explained that government spending was generally only realized in the fourth quarter.
“In terms of government consumption, which was negative, we saw that in the third quarter seasonally government consumption was negative,” said Sri Mulyani.
“Yesterday I calculated from the posture until December, seeing that the expenditure allocation was still there for the last 3 months, the expenditure in the APBN was still IDR 1,078 trillion,” he explained.
Seeing the sluggish economy, the government released a number of policy packages, namely El Nino social assistance (bansos), cheap housing for (Low Income Communities) MBR, and VAT borne by the government.
Through this package, the Minister of Finance hopes to boost the economy in the fourth quarter. Because, without this policy package, the Indonesian economy could weaken by up to 4.81%.
“With this package which can be implemented in the third quarter, we hope to be able to add 0.2% additional growth so that in the fourth quarter economic growth can be maintained at 5.01%, so that in the full year 2023 we hope that our economy will still be maintained at 5.01%. 04%,” he said.
In this regard, senior economist, Anny Ratnawati, warned the government to be alert to the decline in people’s purchasing power. He said that there was a trend that economic growth was actually slowing down in the fourth quarter.
“This pattern must of course be read really carefully,” said Anny.
Anny said that economic growth data in 2022 confirmed that there was a slowdown in economic growth at the end of each year. Furthermore, he gave the example that in the second quarter of 2022, quarterly economic growth only reached 3.72%.
The Gross Domestic Product growth rate then slowed in the third quarter to 1.83% and decreased again in the fourth quarter to only 0.36%.
“That seems extraordinary,” stressed Anny.