It is known that energy prices have been revised several times in recent times. Among them, is the increase in Pertamax, Petalite, and Solar in early September 2022. On October 1, 2022, the price of Pertamax was then lowered.
If we look at the main drivers of inflation on an annual basis, the main drivers of inflation on an annual basis are gasoline, inter-city transportation, diesel, and households.
This implementation is closely related to the October IKK requirements which BI will soon issue. It should be noted that at the end of this year the impact of the increase in fuel prices will again be seen.
- Purchasing Manager's Index (PMI)
S&P Global reported that Indonesia's Manufacturing Purchasing Manager's Index (PMI) or manufacturing index in October 2022 fell. Indonesia's PMI is at the level of 51.8 or down 53.7 in September 2022.
Head of the Fiscal Policy Agency, Ministry of Finance, Febrio Kacaribu. Estimates that Indonesia's Manufacturing PMI will remain intact. He saw Manufacturing PMI growth in the expansionary zone amidst the global turmoil. He considered Indonesia to be relatively strong compared to Manufacturing PMI in several other countries which recorded further declines, such as Malaysia at 48.7, Taiwan at 41.5, and South Korea at 48.2.
However, the wave of layoffs should be watched out for, especially in labor-intensive industries. This is because the number of layoffs (PHK) and employees being laid off continue to increase in labor-intensive industries, especially garments or apparel, to footwear and toys. It is estimated that if the government does nothing or stays silent and does not act, labor-intensive industries will see up to 100,000 people (PHK) by December.
But in Indonesia, the recession has not yet come, layoffs are starting to hit.
- Export
Indonesia's trade balance has been a surplus for 29 consecutive months since May 2020. Indonesia's exports reached US$24.80 billion in September 2022, an increase of 20.28% yoy. Compared to the previous month, exports fell by 10.99%. This was due to the drop in the price of Indonesia's main export. In August 2022, exports totaled $27.91 billion, an increase of 30.15% (in 2022). The decline in exports is likely to continue next year globally.
However, Senior Economist Chatib Basri assesses that the impact of the global shock on Indonesia's exports will not be large. This is because Indonesia's exports only contribute 25% of its economic growth, compared to Singapore whose exports contribute 200% of its economic growth. As a result, the Indonesian economy will only slow down.
Looking at these indicators, the government seems still optimistic that Indonesia's economy will grow strongly in the third quarter of 2022.
The Ministry of Finance (KemenKeu) estimates that Indonesia's economic growth will increase by around 5.7% in the third quarter of 2022 amid the current global economic turmoil.
