Indonesia's parliament is now focusing on helping Bank Indonesia prepare itself for the onslaught of a recession. However, the Central Bank of this country said they are confident enough to ward off a recession, but the US Dollar is affected by the Rupiah.

Sustainable economic growth is now becoming legislative critics. Financial inclusion in the digital era is also a significant concern, as Bank Indonesia's board could be pressured to stimulate growth. 

This also raises other suggestions for the progress of the domestic market. "So this is a progress in terms of professional independence with the board of governors," said Finance Minister Sri Mulyani to the reporters after the vote. 

She also added that this applied to the Indonesian Financial Services Authority board or OJK. Bank Indonesia gave the growth mandate, and Governor Perry Warjiyo has said that the central bank already considers economic growth .

What he means is that when formulating monetary policy for Indonesia’s economy. BI also bought more than $60 billion worth of bonds directly from the government.

Indonesia's Economic Growth is predicted to be Lower in 2023; Central Bank Support Stability and Growth

The Central bank has always cared deeply about economic growth in addition to its inflation-fighting mandate. This has never needed to be spelled out because the focus of Bank Indonesia is on prioritizing stability, and the market might otherwise ignore the bank.

Parliament has also been mulling changes over how Bank Indonesia should operate since the start of the pandemic. However, what made Sri Mulayni and Bank Indonesia quite panicked was that Indonesia's economic growth in the year-on-year system was lower.

It is stated that the Indonesian economy is projected to grow by around 5.1% to 5.3%. However, this will also affect Indonesia's economic performance next year. A lower economic forecast will only cause panic, and the export sector will slow down.

Meanwhile, concerns are not only aimed at the economic growth sector. However, the Indonesia Central Bank also sees inflation at 5.4% in the inflation sector. Meanwhile, for market closing in 2023, inflation will be more controlled at only 3%.

Bank Indonesia also started holding a two-day monetary policy meeting on Wednesday last night. The decision will be taken today, but BI will likely hike its benchmark rate by 25 basis points on Thursday.

Furthermore, economic demands also came directly from the President of Indonesia, who said that Indonesia's banking industry must be more supportive of the micro, small and medium enterprises program.

The main reason why that sector is chose is that is the primary key for the Central Bank to grow. With the proposed total credit portfolio, specific business clusters can be included in a particular projection from Bank Indonesia.

However, focusing on the effects of inflation and the economic slowdown is necessary because Indonesia has issued a ban on commodity exports shortly.

Indonesia Central Bank Calls Inflation 2022 at 5.4% 2023's at Around 3%, and Means Indonesia Is Invulnerable to Recession?

It is stated that Indonesia in 2022 will only experience a low inflation rate of around 5.4%. Meanwhile, for 2023, the figure will be even more petite, namely 3%. 

From this inflation projection, the Indonesian economy will likely be immune from the effects of a recession. In the midst of global economic threats of recession, the Indonesia Central Bank is instead focusing on other things.

Bank Indonesia's primary goal of remaining calm is to attract the attention of foreign investors. Moreover, in several existing laws, Indonesia's recession only had a negligible impact.

Indonesia is quite lucky because the recession, which is a threat to the global economy in 2023, will only threaten stability in foreign markets. However, the main threat now comes from the Rupiah, and policies from the Fed may influence the Indonesian market.