JAKARTA - The World Bank (WB) projects that the Republic of Indonesia will grow by an average of 4.8 percent until 2027.
Details of projected growth of 4.7 percent in 2025, 4.8 percent in 2026, and 5 percent in 2027.
"Gross is projected to reach an average of 4.8 percent by 2027, but uncertainty in trading policy could affect investment and growth," the World Bank said in a Macro Poverty Outlook report reported by ANTARA, Monday, April 28.
According to the World Bank, Indonesia's growth remains resilient, poverty and unemployment have decreased, but middle-class job creation lags behind. Global and domestic policy uncertainties trigger the outflow of the portfolio, which suppresses the rupiah.
Therefore, structural reforms to accelerate productivity growth, in addition to fiscal and monetary caution, are key to advancing the government's growth agenda.
Indonesia will reach the status of an upper-middle-income country by 2023 and target the status of a high-income country by 2045.
To achieve this goal, Indonesia must accelerate its growth by at least 6 percent.
The government targets 8 percent by 2029 through higher investment.
While strong demand has supported stable economic performance and reduced poverty, accelerating growth requires the implementation of structural reforms to increase the country's growth potential and reduce the risk of overheating.
In the report, the World Bank expressed uncertainty over global trade policies and lower commodity prices will affect Indonesia's trade requirements and investor confidence.
While it is difficult to measure the full impact of recent measures as policy shifts may continue to occur, growth is projected to slow down to an average of 4.8 percent during 2025-2027.
The announced demand stimulus coupled with the reforms planned to increase economic capacity could offset that impact.
The formation of capital is expected to increase gradually because investment through the Anagata Nusantara Resources Investment Management Agency (Danantara) is realized.
The growth in private consumption will remain resilient, with little moderation due to the lack of quality employment opportunities.
The existence of sustainable demand, the poverty rate, as measured on the lower middle-income (LMIC) line, is projected to drop to 11.5 percent by 2027.
The positive output gap will trigger inflation, which is expected to remain within the range of Bank Indonesia's targets.
Shopping is projected to accommodate new priority programs, increasing the fiscal deficit to 2.7 percent of gross domestic product (GDP).
Shopping will switch further to social spending, including the new Nutrition Food Program.
Debt will stabilize at about 41 percent of GDP, with higher loan costs pushing interest payments to 19 percent of total revenue.
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In the midst of limited global financial conditions and trade policy measures, the current account deficit is projected to widen to 1.7 percent of GDP in 2027 below pre-pandemic levels.
Direct foreign investment will remain the main source of external funding, most of which are directed at downstreaming the industry, but will increase gradually over time as foreign investors seek better policy stability.
"Risiko terhadap prospek cenderung menurun. Ketidakpastian kebijakan perdagangan, harga komoditas yang lebih lemah, dan ketidakpastian kebijakan domestik dapat menimbulkan tantangan bagi pertumbuhan," ungkap Bank Dunia.
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