In the latest economic market review, we are presented with two contrasting yet coexisting sides: soaring optimism and limited growth foundations. As a senior economist at Sol Securitas, Fitra Faisal discusses the economic events of the past week and provides projections for the upcoming week.
On a note filled with optimism, the Consumer Confidence Index surged significantly to 127.7. This figure not only broke the highest record in the past year but also surpassed the numbers in previous months, including the sharp drop to 123 in February and March. This is a promising indicator for the market; however, it is worth noting that this surge is likely influenced by seasonal factors such as the Lebaran (Eid) celebrations.
However, behind the euphoria reflected in the Consumer Confidence Index, other data indicate that growth remains limited. The latest Retail data released by Bank Indonesia shows stagnant growth, only 0.1% in April compared to the previous month. Even year-on-year, this growth experienced a significant decline, from 9.3% to just 0.1%. This highlights the disparity between market perception and the economic reality in the retail sector.
Looking ahead, questions arise about Indonesia’s economic growth prospects. Although the first quarter still saw growth at 5.11%, signs of strong growth momentum are likely to start waning. A growth projection below 5% might be more realistic, though still above 4.8%, but this remains a challenge to be faced.
In an interview with Bloomberg, Coordinating Minister for Maritime Affairs and Investment Prabowo Subianto expressed optimism that economic growth could still reach over 8% in the next two to three years. However, this view needs to be approached with caution, considering the challenges in achieving high economic growth.
As Fitra Faisal pointed out, achieving high economic growth is not easy. Risks such as an overheating economy can arise if growth is pushed too hard, such as widening fiscal deficits and potential currency depreciation. Therefore, careful and sustainable steps are needed, one of which is to promote industrialization to build a strong growth foundation.
Nevertheless, the market still shows positive momentum. Sectors such as energy, basic materials, and healthcare show attractive growth potential. The bond market also shows gradually declining yields, offering opportunities for investors.
In this context, it is important for market players to remain cautious yet enthusiastic. High growth projections are indeed enticing, but careful planning and strategies are necessary to navigate them. Thus, we can hope that Indonesia will continue to develop with a strong growth foundation, despite facing several challenges.
