BI Predicts Global Economic Growth Will Slow Down 2.8 Percent in 2024

BI Governor Perry Warjiyo (Photo: ARIS Nurjani/VOI)

JAKARTA - Bank Indonesia (BI) estimates that global economic growth will slow down in 2024 by 2.8 percent yoy.

BI Governor Perry Warjiyo revealed that Bank Indonesia still estimates global economic growth in 2023 at 2.9 percent and slowing to 2.8 percent in 2024.

Perry said that the United States (US) economy was still growing strongly, driven by household consumption and the domestic-oriented service sector, while China's economy was improving, supported by consumption and the impact of fiscal policy stimulus.

"Inflation in developed countries is still above target with pressure starting to ease," said Perry in a press conference, Thursday, November 23.

With this development in inflation, monetary policy interest rates including the Federal Funds Rate (FFR) are predicted to remain high for a long period of time (higher for longer).

In addition, the yield on government bonds in developed countries, especially the US (US Treasury), is believed to be rising high due to the long-term risk premium or what is usually called term premia related to the high need for debt for fiscal financing in the US.

Uncertainty in financial markets continues, thus affecting the volatility of capital flows and pressure on the rupiah exchange rate in developing countries or emerging markets, including Indonesia.

According to Perry, conditions in other superpowers such as China do not appear to be very positive and it is believed that China's economic growth is in a downward trend. Despite reports, China's economy is showing improvement driven by household consumption and the impact of fiscal policy stimulus.