Indonesia stays upbeat on 5% growth despite gloomy China outlook

INDONESIA Finance Minister Sri Mulyani Indrawati said she was optimistic about the 5 per cent economic growth target this year despite the darkening global outlook, especially from China.

“We are optimistic for 2023 because we see the figures on the first half,” Dr Sri Indrawati said in an interview with Bloomberg Television’s Haslinda Amin ahead of the G20 finance chiefs’ meetings in India. “The second half, there is a positive side from our own side, explicitly on household consumption.” 

While there has been signs of weaknesses in South-east Asia’s largest economy, including weaker exports, Dr Sri Indrawati said elections next year will also spur the economy thanks to extra spending from the government as well as political parties.

Dr Sri Indrawati said Indonesia was looking to strengthen its ties with India as both economies look for ways to shield against the impact of China’s lacklustre performance.  

“Their economic growth is remarkably very strong. And that’s why they need quite a lot of imported commodities (from) Indonesia,” she said in reference to India. “We’re here trying to discuss on the partnership which is going to be much benefiting both sides.”

China is grappling with several challenges, including the looming prospect of deflation, subdued economic growth and a faltering property market. India on the other hand is posting one of the fastest growth rates in the world thanks to the expansion of its services sector, cushioning the impact of elevated interest rates.