The World Bank predicts Indonesia’s economic growth will be 4.8% in 2023 or revised down from the original estimate of 5.3%.
Even though it is revised down, Indonesia’s economy is predicted to remain solid this year, because the slowdown in economic growth this year is also not more severe than other countries in the region such as China’s 4.8% and Thailand’s 3.6%.
In fact, economic growth in Malaysia, the Philippines and Vietnam is expected to slow down due to slowing growth in exports to major markets. Malaysia’s economic growth is projected at 4.0% and the Philippines around 5.4%, and Vietnam around 6.3%.
“In Indonesia, GDP is projected to grow by an average of 4.9% in 2023-2024, only slightly slower than in 2022, reflecting weakening but still strong private spending,” said the World Bank in its January edition of the Global Economic Prospects report, Wednesday (11/1/2023).
The World Bank said that after a strong economic recovery, business confidence is expected to remain solid against the backdrop of sound macroeconomic fundamentals and structural reforms implementation momentum, including in tax policy and administration.
“These projections are motivated by a number of downside risks, including the possibility of new disruptions related to the pandemic, more prolonged pressure on the real estate sector in China, a sharper tightening of global financial conditions,” said the World Bank.
Furthermore, the weakening global economy has also caused the performance of the world economy to slow down, which has been accompanied by increasingly disturbing climate change.
Finally, the factor of continuing the protracted war in Ukraine and increasing geopolitical uncertainty. “This factor could further dampen business and consumer confidence globally and lead to a sharper-than-projected slowdown in regional export growth,” the report concluded.