Jakarta (22/9) - As part of Jakarta’s effort to promote investment in Jakarta, Jakarta Investment Centre (JIC) held JIC Talks 5 with a theme on “Mitigating the impact of inflation on investment” on Thursday, 22 September 2022. Participated by almost 200 hundred participants from across the city, this webinar aimed to educate the public about personal financial investment in the midst of global inflation that is currently occurring.
Global economic conditions are expected to face turmoil with the current rising inflation rate. This is due to the post-Covid-19 economic recovery condition which is exacerbated by the current world geopolitical tensions. The increase of inflation rate has the potential to reduce people's purchasing power. For this reason, investment can be an instrument to mitigate it.
According to data launched by the Central Bureau of Statistics (BPS) of DKI Jakarta Province in August 2022, the inflation rate in Jakarta reached 3,5 percent. This number is lower compared to the national inflation rate which was 4,94 percent. Although inflation can increase investment risk, investment might also be a way to deal with inflation.
The Center of Economic and Law Studies (Celios) stated that the number of investors in the Indonesian capital market is 0.8 percent of the total population of Indonesia, which currently amounts to 7.3 million people. Even though investment culture among the public has started to grow, this percentage is still lagging behind other countries in Asia such as Malaysia and Japan, which until January 2022 has investors amounting to 32.4 percent and 48.3 percent of the total population consecutively.
Present as the presenters in the JIC Talks this time, the Expert Economist of Bank Indonesia DKI Jakarta Representative Office, Muhamad Shiroth; Financial Planner and Founder of Finansialku, Melvin Mumpuni; and Financial Mentor of Bibit, Raymond Iriantho. This session was moderated by the Head of Investment Division, Department for Investment and Integrated One-Stop Services (DPMPTSP), DKI Jakarta Provincial Government, Budya Pryanto Putra.
Expert Economist of Bank Indonesia DKI Jakarta Representative Office, Muhamad Shiroth explained that in the last sixth months, global inflation level has far exceeded the projection in December 2021. However, inflationary pressures in Asia were not as high as in Europe.
Economic improvement in Indonesia and Jakarta continues. The realization of GDP in Q2 2022 reached 5.44% (yoy), much higher than the previous quarter's forecast and achievement of 5.01% (yoy). During the same period, the DKI Jakarta Province's economic growth was also recorded at 5.59% (yoy), higher than the previous quarter's 4.62%.
"Jakarta's economic growth in 2022 is estimated to be in the range of 5.3-6.1 percent," he said.
Going forward, the Bank of Indonesia will continue in making efforts to mitigate inflation and keeping it under control. Shiroth also hopes that investment participation from the community (retail) will also support the development financing.
“We required other funds that are known as innovative financing such as bonds, mutual funds, and so forth. Later, it should be all connected. That’s what Indonesia needs in the future. Participation, particularly in the retail sector, to be able to fund the (development) financing,” he said.
Along with it, Melvin Mumpuni as a Financial Planner and Founder of Fiansialku invites all participants to do 3 (three) action plans as an effort in mitigating the global recession which is estimated will happen in 2023.
“First of all, we have to review our financial condition. Be (financially) healthy first. The storm is coming but we are ready. If we are financially ready, we are then ready. Everything will be okay,” he said.
“Secondly, if possible, we should save some spare. We still have time. Do the planning first. Third of all, start. Then, we should monitor how our investment will be with the possibility of interest rates increasing in most countries? We need to monitor it,” said Melvin.
"Well, with these three things, I'm sure all of us will be better prepared to face the coming storm," he added.
Financial Mentor of Bibit, Raymond Irianto, supports that statement. He mentioned that investment can be an instrument to mitigate inflation in preparing a healthy financial future. “One piece of real evidence of why we should (invest) is inflation. None is able to control the price increment. It can go up in one year swiftly. If we do not invest, how are we going to survive?,” he said.
An example of investment instruments that could be accessed by the public is mutual funds that later on can be invested into stocks, bonds, and money market instruments. Mutual fund is a platform to raise public funds managed by a legal entity called the Investment Fund Manager.
Mutual funds are also known as an investment alternative for investors with low risk and relatively safe due to its investment diversification system. “So if one goes down, maybe another one goes up,” said Raymond.
However, he reminded the public to invest wisely by using cold cash. “Investment is a part of financial planning. Do not focus too much on investing because if we are being wrongly focused, we might use any inappropriate sources for it. Always remember to prioritize cold cash to invest. If our financial plan is right, our investment (outcome) will also be good in the long run," he said.
Through this webinar, JIC Talks 5 is expected to contribute in improving the economy by giving dissemination to the public on investment instrument varieties in the midst of inflationary pressures.
JIC Talks 5 can be re-watched in the ‘Jakarta Investment Centre’ YouTube channel, click HERE!