BI Boss Predicts Global Economy Will Grow 3.2 Percent in 2024 Driven by US and Europe

US dollar (Photo: dock unsplash)

JAKARTA - Bank Indonesia (BI) estimates that the global economy in 2024 will grow by 3.2 percent as forecast, driven by the United States (US) and Europe.

BI Governor Perry Warjiyo said that global financial market uncertainty remains high amid strong global economic prospects.

"The global economy in 2024 is predicted to grow by 3.2 percent as forecast, driven by the United States (US) and Europe," he explained in a press conference, Wednesday, July 17.

Perry said that US economic growth remains good, supported by consumption and fiscal stimulus. Meanwhile, the European economy is predicted to grow higher, driven by improvements in exports and investment. Meanwhile, China's economy is not yet strong due to weak domestic demand.

Perry said that US inflation in June 2024 was lower than forecast, influenced by declining energy and housing inflation.

"This encourages the forecast of a reduction in the US policy interest rate or Fed Funds Rate (FFR) to be faster than the previous projection at the end of 2024, amidst the 10-year US Treasury yield which remains high due to the US Government's budget deficit needs," he said.

Perry conveyed that the uncertainty of the global financial market is still high and geopolitical tensions that have not subsided, resulting in relatively limited capital flows to developing countries.

According to Perry, this development implies the need to continue strengthening policy responses to mitigate the negative impacts of the spread of global uncertainty to the economies of developing countries, including Indonesia.