Economist values Indonesia's economic foundation remains well-maintained

Chief Economist of Bank Permata, Josua Pardede, believes the public does not need to respond to current economic developments with excessive worry, given that a number of key indicators show the national economic foundation remains well-maintained. “What needs to be understood is that the current condition is a phase of adjustment to global dynamics, not a crisis signal. Therefore, what is more important is maintaining rational optimism based on data and existing economic fundamentals,” said Josua during the Komunita Economic Talk, as quoted in an official statement in Jakarta on Friday. He noted that public consumption activity is still growing, inflation is within a controlled range, the banking sector remains healthy, and the state budget (APBN) is still capable of carrying out its function as an economic stabilisation instrument. Amid various global pressures, these indicators serve as important supports for national economic stability. Josua explained that Indonesia’s economic resilience is reflected in a number of macro indicators that still show a positive trend. National economic growth remains at a relatively high level, while inflation is still maintained, thereby supporting the stability of public purchasing power. Household consumption, which is the largest contributor to Gross Domestic Product (GDP), is also still showing solid growth. In addition, the increase in government consumption at the beginning of the year has provided support for domestic economic activity. From the financial market side, foreign capital flows into the government securities (SBN) market are still recording positive performance. This condition reflects that investors continue to place trust in Indonesia’s economic prospects amidst rising global uncertainty. Responding to public concerns regarding the weakening rupiah, Josua assessed that the condition needs to be placed in a broader global context. The strengthening of the United States (US) dollar due to high interest rates in developed countries and increasing geopolitical uncertainty has put pressure on many world currencies. He also dismissed the notion that Indonesia is heading for a crisis like the one that occurred in 1998. According to him, the structure of the Indonesian economy today has far better resilience than when the Asian crisis occurred nearly three decades ago. Amid relatively positive macro data, Josua acknowledged that some people still feel pressure on their financial condition. However, according to him, the current phenomenon is more accurately understood as a change in consumption patterns rather than an overall decline in purchasing power. Price pressure on a number of commodities makes people more selective in spending their income, while in aggregate, domestic consumption remains the main engine of national economic growth. To protect vulnerable groups, the government also continues to strengthen various social protection programmes so that the impact of economic pressure can be minimised. Josua also emphasised that public trust is one of the most important assets in maintaining economic growth momentum. According to him, the economy is not only determined by statistical figures, but also by the confidence of the public, business actors, and investors in future prospects. Amid various ongoing global challenges, he invited the public to remain optimistic, productive, and adaptive to change. “Indonesia has a strong economic foundation, adequate policy capacity, and great opportunities to continue growing. Therefore, optimism based on data and a good understanding is very important in facing various challenges ahead,” said Josua.