Indonesia’s economy expected to remain resilient, World Bank says

Loading and unloading containers at the Tanjung Priok port area, Jakarta (Photo: Antara)

Jakarta, June 25 (VNA) – Indonesia’s good economic performance is largely due to the government’s strong macroeconomic policy framework, which helps attract investments, the head of the World Bank said on June 24 (BM) for Indonesia and East Timor, Carolyn Turk.

In its latest report titled Indonesia Economic Outlook, June 2024 Edition, the WB said a prudent and coherent macroeconomic policy framework has become the basis for Indonesia’s successful economic performance, recognized by the market.

The credit default swap rate and JP-Morgan Emerging Market Bond Index (EMBI) spread for Indonesia have continued to decline since the COVID-19 pandemic and are lower than several peer countries , he says.

The credit rating agency also maintained an investment grade rating for sovereign credit, with a stable outlook, so Indonesia has managed to overcome external shocks, attract investment and support growth.

According to Carolyn Turk, it is important to maintain prudent, credible and transparent macroeconomic policies while creating fiscal space for priority spending on social protection as well as investments in human capital and infrastructure.

The WB believes that Indonesia’s economy will grow resiliently at a stable pace in the coming years, driven by increased government spending, increased business investment and stable consumer demand.

Indonesia’s gross domestic product (GDP) growth is expected to average 5.1% per year from 2024 to 2026, despite growing hurdles from falling commodity prices, increasing volatility in commodity prices, food and energy and growing geopolitical uncertainty, she said.

The country’s GDP growth of 5.1% in the first quarter of this year remains strong and exceeds the average growth of middle-income countries. Private consumption reached 57% of GDP growth, reflecting consumer confidence supported by lower non-food inflation, rising civil service salaries and good performance of consumer services.

Carolyn Turk noted that public consumption strengthened again in the first quarter of 2024, driven by election and social spending, adding that this is a reason to boost the Indonesian economy despite a decline in net exports due to weak global demand and falling commodity prices. -VNA

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