Jakarta’s economic outlook is projected to remain a bright spot in 2023

JAKARTA (2/12) - Jakarta’s economic outlook is projected to remain strong in 2023 in the midst of global economic turmoil. This message was agreed by economic experts in the JIC Talks 7 “Jakarta’s economic and investment optimism” which was held by Jakarta Investment Centre (JIC) on December 1st 2022 at Mall Pelayanan Publik, Kuningan.  

The discussion presents Senior Economist of Bank Indonesia Jakarta Representative Office, Reska Prasetya; Economist of the University of Indonesia, Fithra Faisal; and Head of Research and Economics of PwC Indonesia, Denny Irawan. Moderated by Division Head of Economy from Jakarta Capital City Government Planning Board, Ahmad Giffari, the discussion was greeted enthusiastically by around 100 participants from various business sectors. 

Senior Economist of Bank Indonesia Jakarta Representative Office, Reska Prasetya, stated that in the midst of global economic slowdown, Jakarta’s economy continues to grow and keep on showing recovery with 5.72% growth in Q3-2022 supported by domestic demand and investment. This growth is predicted to continue with approximately 4.5-5.3% growth in 2023. 

To optimize it onwards, Jakarta is expected to boost new potential sectors as a new economic growth source through the development of service sector and premium manufacturing considering its market. Another potential includes tourism and creative economy; financial service; trade, transportation, warehouse, telecommunication and information; education and health; and real estate. On a side note, a development focus towards green investment is also imperative as foreign investment continues to favor various green projects such as renewable energy. 

As for Indonesia's national economy, Economist from the University of Indonesia, Fithra Faisal, conveyed the same optimism. He stated that the national economic growth is predicted to be around 4.9-5.1% in 2023. Indonesia also experienced a surplus in  the last 30 months. However, this still has to be monitored to ensure that the existing policies not only give a myopic (short-term) impact but rather a long-term one. 

From a global perspective, Denny Irawan stated that more than a third of the global economy is expected to contract this year, while the three largest economies which are the United States (US), the European Union (EU) and China will continue to stall. However the economic growth of Indonesia’s main trading partners will continue to be positive in Q3 2022 despite global economic slowdown. 

The PwC Global CEO Survey to a sample of 4,000 global CEOs from 89 countries indicates optimism towards continued economic resilience despite the short-term risk. However, global CEOs rank cyber risk as their top concern which must also be considered by Jakarta. 

Several development priorities also have to be Jakarta’s focus to invite more investment to the city, especially after the relocation of the capital city to Nusantara. This includes reframing the Environmental, Social and Governance (ESG) into a series of realistic trade-offs to short-term financial goals to bring investors and stakeholders along on the journey. 

Jakarta will continue to strive in maintaining a positive investment climate in 2023 and looking forward for more investment collaboration in the future!