Strong Dollar Sets a Gloomy Outlook on 2023 Economy Growth

Bank Indonesia predicts Indonesia's economy will only grow 4.37 percent next year, lower than the government's estimate of 5.3 percent. Bank Indonesia Governor Perry Warjiyo said the central bank is cautious in formulating macroeconomic assumptions in 2023 due to increasing global turmoil and uncertainty.

BI observes several factors, such as high inflation and the weakening rupiah exchange rate, so a tighter monetary policy is needed. This will have an impact on slowing economic growth.

"Indeed, global conditions will continue to fluctuate this year and next year. We don't know when the war between Russia and Ukraine will end. Moreover, now the trade war between the United States and China is heating, geopolitical tensions in Taiwan, and China will also extend the lockdown policy for the next two quarters," Perry said in BI's 2023 Annual Budget Plan (RATBI), submitted to the House's Finance Commission, Monday.