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Indonesian FInance Minister Sri Mulyani Indrawati speaks to Rich Karlgaard, editor-at-large at Forbes Media, at the Forbes Global CEO Conference in Singapore.
Domestic demand will help the Indonesian economy keep growing after the economy’s “remarkable” achievement of expanding more than 5% in each of the last seven quarters, Finance Minister Sri Mulyani Indrawati told the Forbes Global CEO Conference in Singapore on Monday.
“Indonesia is relatively lucky. We are quite resilient, domestic demand is there,” Sri Mulyani said.
For the second quarter of this year, Southeast Asia’s largest economy achieved 5.17% growth from a year earlier, compared with the previous quarter’s 5.04%. Growth in the last period was driven by household consumption which increased by 5.23% year-on-year, rising incomes, and contained inflation. The central bank has projected that the country would record growth of up to 5.3% this year.
Sri Mulyani, who flew to Singapore from the G20 meeting in India, noted that Indonesia had been successful in containing its fiscal deficit in the wake of the Covid-19 pandemic, when the deficit was allowed to increase beyond the legal limits of 3% of gross domestic product. This year, the deficit is expected to be only 2.3%. She said that some ministers at the G20 meeting “envy me for that.”
In January this year, the annual headline inflation rate was 5.28%. It shrank to 3.08% in July before edging up to 3.27% in August. The minister said a key part of higher global inflation was supply-side problems, which the government has sought to deal with.
She said this year was “not really good news” for the global economy, including weak trade, but for 2024 “we have more reason to be optimistic” on the inflation picture.
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