World Bank Predicts Stable Economic Growth for Indonesia Until 2023

Economics & Macro

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Adi Ahdiat 29/09/2022 10:50 WIB

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The World Bank projects Indonesia's economic growth to reach 5.1% in 2022 and remain at the same level in 2023.

Southeast Asian Countries' Economic Growth Projection (2021-2023)

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World Bank Predicts Stable Economic Growth for Indonesia Until 2023

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Southeast Asian Countries' Economic Growth Projection (2021-2023)

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The World Bank projects stable economic growth for Indonesia until 2023. This projection is included in the October 2022 edition of the *East Asia and the Pacific Economic Update* report.

The report estimates that Indonesia's Gross Domestic Product (GDP) growth will reach 5.1% in 2022. Growth is then projected to remain at the same level in 2023, as shown in the graph.

Unlike Indonesia, neighboring countries are projected to experience different economic trends.

Malaysia, for example, is projected to achieve 6.4% GDP growth in 2022, a significant increase compared to last year. However, its growth is projected to slow down in 2023. Similar trends are predicted for the Philippines and Vietnam.

Thailand and Cambodia, on the other hand, are projected to see upward economic growth trends until next year, as shown in the graph.

"Although the Chinese economy slowed in the first half of 2022, most countries in the East Asia and Pacific region are projected to have higher economic growth and lower inflation than other countries worldwide," the World Bank stated in its report.

The World Bank attributes the relatively strong economic growth of most East Asian and Pacific countries to three factors: high consumer spending, continued export demand, and monetary tightening policies implemented by individual countries.

Despite the generally positive projections, the World Bank cautions about the risk of economic slowdown from various factors.

"East Asia and Pacific countries face various challenges, both external and self-created," the World Bank stated.

The World Bank notes that a global economic slowdown could potentially suppress export demand for commodities and manufactured goods from the East Asia and Pacific region.

Furthermore, interest rate hikes abroad are driving capital outflows and domestic currency depreciation, which increase debt servicing burdens and contribute to inflation.

Government policies aimed at protecting households from rising living costs, such as large-scale subsidies, are also considered to pose a risk of burdening domestic economic growth.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."