More Than A Month Left, BI Believes Global Economy Will Grow 2.9 Percent In 2023

BI Governor Perry Warjiyo (Photo: dock. Antara)

JAKARTA - Bank Indonesia (BI) believes global economic growth in 2023 will move in the range of 2.9 percent yoy.

BI Governor Perry Warjiyo said this growth was in line with the positive developments that occurred in the international community, such as the economic growth of the United States (US) which was still growing strongly driven by household consumption and the domestically oriented service sector.

Meanwhile, China's economy is improving, supported by consumption and the impact of fiscal policy stimulus. However, the growth trend has indeed decreased. In terms of inflation in developed countries, it is still above the target with inflationary pressures starting to subside.

"With this inflationary development, the monetary policy interest rate including the Federal Funds Rate (FFR) is predicted to last a long time (higher for longer)," Perry said at a press conference, Thursday, November 23.

In addition, yields (yield) of government-forward bonds, particularly the US (US Treasury), rose high due to long-term risk premiums (term-premia) related to the high need for fiscal financing.

However, Perry reminded that financial market uncertainty is still continuing and affects the volatility of capital flows and the pressure of exchange rates in emerging markets. No exception, Indonesia also felt the negative impact of this uncertainty.

Furthermore, in 2024, Perry estimates that world economic growth will slow down with uncertainty that is still high so that global economic growth will slow down in the range of 2.8 percent yoy.