Indonesia Can Survive Recession While Economic Growth Slows

Although Indonesia is expected to be able to survive the imminent global recession, its economic growth will continue to slow next year. Joko “Jokowi” Widodo has reminded his ministers to be careful in determining polici

KOMPAS/RADITYA HELABUMI

Visitors see food products produced by MSME entrepreneurs in the series of Indonesia Sharia Economic Festival (ISEF) at the Jakarta Convention Center, Jakarta, Wednesday (5/10/2022). The slowing of the world economy, including China as one of Indonesia's main trading partners, will disrupt export performances and slow down economic growth in 2023.

JAKARTA, KOMPAS - Although it is estimated that Indonesia will not fall into recession in 2023, the decline in economic growth will be inevitable. The reduced state revenues and state expenditures being limited in order to maintain the state budget deficit below 3 percent will narrow the fiscal space. State spending must, therefore, be prioritized to protect the vulnerable populations.

Indonesia is considered a little more fortunate than other countries in the region, such as Singapore and Malaysia, because the economy is not too dependent on exports that are expected to decline due the slowdown in the global economy next year.