Export Could Save Indonesia's Economic Growth during Uncertainties
- VIVA/M Ali Wafa
VIVA – 2022 was considered as a transition year for countries worldwide to end the Covid-19 pandemic. People must stay home, but after the mobility restrictions were lifted, the level of consumption increase that in turn affected the inflation rate.
When inflation was high at the start of 2022, monetary authorities said there was nothing to worry about, as they said it was natural during the transition to the post-pandemic era. However, Russia's invasion of Ukraine in March last year has made food and energy prices soar, increasing the inflation rate to be higher.
The world's central banks then raised benchmark interest rates to curb inflation. However, inflation has not yet declined and the risk of a global recession loomed toward the end of 2022. However, as of early 2023, it turned out that the situation is not as severe as feared. For instance, inflation in the United States fell to 6.5 percent.
Meanwhile, the global banking crisis recently emerged, such as the collapse of the Silicon Valley Bank (SVB) in the US and the crises that Credit Suisse and Deutsche Bank in Europe faced.
Global economic uncertainties continued on account of these crises, especially for Indonesia.
Ilustrasi Ekspor Impor/Jasa Logistik.
- VIVA.co.id/M Ali Wafa
Economist and Rector of Atma Jaya Catholic University Agustinus Prasetyantoko explained that the risk of recession, rising interest rates, and banking crisis certainly affect Indonesia's financial conditions. The capital market was volatile, the rupiah weakened, and the pressure on Bank Indonesia to raise its benchmark interest rate increased.
However, in terms of trade, when the Russia-Ukraine war erupted, Indonesia's exports increased, given that most of its export products are commodities. The increase in commodity prices made state revenues rise and the budget deficit could be reduced.
"We are actually offset by the situation. Pressure from the financial channel is offset by the trade channel where exports are a buffer for the arising turbulence, making our economy remain resilient," he explained.
