2023 should be a year full of optimism, with the economic shortfalls of the pandemic finally waning. However, this optimism was dampened by the projections of a few international institutions noting the risk of a global recession this year, as well as the turbulence of Indonesia’s political year ahead of the 2025 general election. But how will this affect tourism, and is Indonesia’s tourism industry confident?

The International Monetary Fund (IMF) cut its global growth rate forecast to 2.7% this year. The IMF, World Bank, Asian Development Bank and Organisation for Economic Co-operation and Development are also unified in projecting Indonesia’s economic growth in 2023 in the range of 4.7% -5%. This figure is below the government’s target of 5.3%. Even so, the government still hopes that this year’s national economic growth will be on target. The good news is that Indonesia’s economic fundamentals are considered relatively positive and far from recession.

In the midst of global uncertainty, Indonesia is also facing an election year. The socio-political dynamics ahead of the presidential election in 2024 will certainly be felt this year. The existence of a domestic political agenda towards elections certainly has the potential to raise the political temperature.

Despite these uncertainties, the Minister of Tourism and Creative Economy, Sandiaga Salahuddin Uno believes that the tourism and creative economy sector will continue to grow. At the annual seminar, Indonesia Tourism Outlook 2023 entitled Prospects for Tourism and Hospitality Industry Investment in the Political Year held by the Tourism Journalists and Creative Economy Forum in collaboration with HAM at Artotel Suites Mangkuluhur on January 18, he said:

“This political year is actually good for tourism and the creative economy because there are definitely a lot of activities in hotels. There is nothing to worry about from a political year and investors don’t need to ‘wait and see’ to invest. In fact, in political years is the best opportunity for investment, including in the tourism sector and its supporters such as hotels.”

This positive reassurance is certainly inline with the government’s investment targets of IDR 1,400 trillion. Efforts to attract investors in the tourism sector are ramping up, especially investment in five ‘super priority’ destinations and tourism Special Economic Zones (KEK).

Meanwhile both foreign and domestic tourism are projected to increase this year. The Ministry of Tourism and Creative Economy/the Tourism and Creative Economy Agency has also set multiple targets:

”For 2023, the target is multiplied by two, from 3.6 million to 7.4 million for foreign tourists. For domestic tourists from 700 million to 1.4 billion (movements),” Minister Uno explained.

If 2022 is anything to go by, this is certainly looking the case. The minister mentioned that last year’s target of foreign tourists was 3.6 million and before closing the year (January-November 2022) it turned out that the number had reached 4.8 million foreign tourists. Likewise domestic tourists who reached 703 million, above the target of 600 million.

Sari Widiati

Sari Widiati

Sari has been an arts and culture enthusiast for many years. She has written extensively on the arts, travel, and social issues as Features Writer at NOW! Jakarta.