World Bank Changes Indonesia's Economic Growth Projection To 5 Percent In 2024

Illustration. (Photo: Doc. Ministry of Finance)

JAKARTA - The World Bank changed Indonesia's economic growth projection to 5 percent in 2024. This figure increased by 0.1 points when compared to the projection in January 2024 of 4.9 percent.

In addition, the World Bank also revised Indonesia's economic growth projection in 2025 to 5.1 percent, an increase from January 2024 projected at 4.9 percent.

The World Bank hopes that Indonesia will benefit from the growth of the middle class and economic policies that are generally wise, which will increase by an average of 5.1 percent over the next two years.

"Based on estimates, GDP growth in most countries in the Asia-Pacific region (EAP) except China, including Indonesia, Malaysia, and the Philippines will be supported by strong private consumption growth supported by low inflation, reduced loan costs, and strong labor market conditions," the World Bank wrote in the June 2024 edition of the Global Economic Prospects report, quoted Thursday, June 13.

However, private and public investment is projected to remain calm. The increasing uncertainty, in some cases related to recent transitions and political conflicts and global trade policies, is expected to reduce private investment.

At the same time, the increase in government debt that exceeds pre-pandemic achievements and delays in budget approval are expected to hinder public investment growth in several economic countries.

Meanwhile, the World Bank projects that economic growth in the East Asia and Pacific region (EAP) will slow down to 4.8 percent in 2024 compared to 2023.

Meanwhile, the economic slowdown in the EAP region is influenced by a slowdown in activity in China as an effort to offset growth in other countries in the region.

In addition, in the future, EAP growth is projected to continue to slow down to 4.2 percent by 2025 and 4.1 percent by 2026.

In the region, except China, its economic growth is projected to increase to 4.6 percent this year, growth will be supported by global trade recovery that will benefit exports and industrial activity.