Wahyu Dwi Anggoro
IDXChannel - Indonesia’s economic growth remains resilient, with inflation on a declining trend, and a stable currency, the World Bank said in its semi-annual Indonesia Economic Prospects report.
GDP growth is projected to ease slightly to an average of 4.9% over 2024-2026 from 5% this year as the commodity boom loses steam.
Private consumption is anticipated to be the primary driver of growth in 2024. Business investment and public spending are also expected to pick up as a result of reforms and new government projects.
Inflation is expected to ease to 3.2% in 2024 from an average of 3.7% this year, within the target band of Bank Indonesia. Falling inflation reflects the softening in commodity prices and a return to normal rates of growth in domestic demand after the post-pandemic bounce-back. At the same time, there is some upward pressure on food prices due to the effects of the El-Niňo weather pattern, which could disrupt food production in some places.
Services exports are expected to benefit from a continued recovery in tourism, while lower commodity prices and weaker global growth will hamper exports of goods. Government revenues as a share of GDP are expected to rise as the effects of tax reforms materialize, while government spending is expected to gradually return to pre-pandemic levels.
