Jakarta (ANTARA) – The economic challenges in the third and fourth quarters of 2022 will be quite big, said Eko Listiyanto, deputy director of the Institute for the Development of Economics and Finance (Indef).
“Especially in the third quarter, when the impetus like religious holidays or other big events is relatively rare, it will certainly have implications for economic performance,” he said in a virtual press conference on Sunday.
In the second quarter of 2022, Indonesia’s economic growth was 5.44 percent. Indef praised this achievement, as the government itself had projected second-quarter growth to be slightly below realisation.
Listiyanto said that if economic growth in the third and fourth quarters of 2022 could be maintained at 5.44 percent, it would be very good.
However, he predicted that economic growth in the third and fourth quarters is likely to be lower than in the second quarter because there is no boost from holidays like Eid, the only boost being Christmas in the fourth quarter of 2022.
“Furthermore, the inflation trend is also rising month-on-month and will also be a challenge as inflation erodes purchasing power and makes consumption even slower,” Listiyanto said.
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Entering the third quarter of 2022, he has hoped that the four main sectors that contribute the most to the Gross Domestic Product (GDP), such as industry, mining, agriculture and trade, can be boosted again.
This is because the contributions of the four sectors to GDP were still low, growing at an average of only 4 percent (compared to the previous year) or below the economic growth (year-on-year) of 5.44 percent of the second quarter. of 2022.
“Earlier growth was actually driven by supporting sectors. Meanwhile, the core sector has not recovered much. If we don’t push the core sector, the economy will be vulnerable,” said Indef’s deputy director.
Global uncertainty, especially due to geopolitical crises such as the war between Russia and Ukraine, will add to the economic challenges in the third and fourth quarters of 2022.
“In addition, there was a provocation from the United States (US), with the arrival of the Speaker of the US House of Representatives (Nancy Pelosi) in Taiwan. This creates even more uncertainty. The geopolitical crisis that previously only gave in Europe is changing. in Asia,” he said.
From a financial perspective, Listiyanto said the aggressiveness of the Fed’s interest rate hike will continue until there are signs of a release from inflationary pressures in the US. The US aims that this aggressiveness will stop if US inflation reaches 2 percent. However, US inflation is currently over 9 percent.
Therefore, Listiyanto estimates that there will still be an increase in the federal funds rate (FFR) next year, which may have implications for the volatility of the financial sector.
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