World Bank Projects Positive Economic Growth for Indonesia in 2021-2023

The World Bank projects that Indonesia's economy will recover after contracting due to the Covid-19 pandemic in 2020. Indonesia's economic growth is projected to be positive from 2021 to 2023.

In 2021, the World Bank projected Indonesia's economic growth at 3.7%. This projection assumes that Indonesia will not experience a more severe new wave of Covid-19.

However, this projection is lower than the projection released last June. At that time, the World Bank predicted that Indonesia's economy would grow by 4.4% in 2021. This downward revision is due to the impact of the Delta variant which spread last July-August.

The World Bank also projects that Indonesia's economic growth will increase to 5.2% in 2022 and 5.1% in 2023. This projection is based on the assumption that the vaccination program will continue, with the expectation that most provinces will achieve a vaccination rate of up to 70% in 2022, and with the proviso that Indonesia will not experience a more severe new wave of Covid-19.

Furthermore, this prediction also assumes that domestic monetary and fiscal policies will remain accommodative, and that global trade growth and commodity prices will increase moderately amid tightening global financial conditions. Consumption is also expected to recover more strongly due to wider vaccination rates, thus boosting consumption and public demand.