JakartaPost-June 23, 2022
The World Bank warns that Indonesia’s GDP growth this year and next could fall far short of the government’s targets should inflationary pressure and therefore global interest rates rise. In a report published on Wednesday, Indonesia Economic Prospects June 2022, the World Bank maintains its baseline scenario for the country’s economic growth at 5.1 percent in 2022 and 5.3 percent in 2023 but warns that it could be as low as 4.6 and 4.7 percent, respectively in a downside scenario. The report contains no upside scenario. The government projects 2022 growth at 4.8 to 5.5 percent and 2023 growth at 5.3 to 5.9 percent, while the Organization for Economic and Cooperation Development (OECD) sees domestic growth this year at 4.7 percent. Even in the downside scenario, Indonesia would fare better than the emerging economy average estimate of 3.4 percent in 2022 and the global average of 3 percent in 2023. “Given the global conditions […] a synchronized and broad-based slowdown in global growth is bound to also impact Indonesia,” World Bank Indonesia and Timor-Leste lead economist Habib Rab told reporters on Wednesday. Sectors aside from resource-exporting ones, such as light and heavy manufacturing, as well as contact-intensive sectors, such as hospitality, services, retail and wholesale trade, are told to brace for a heavy slowdown in this scenario due to higher prices. Should prices increase as much as assumed under this scenario, consumer confidence and demand would drop significantly, he noted. Read more at: https://www.thejakartapost.com/paper/2022/06/22/world-bank-warns-ri-of-downside-risks-to-gdp-growth.html.
