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World Bank revises Indonesia's economic growth estimates down to 5.2 percent
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World Bank Indonesia senior economist Hans Anand Beck (left) and economist Masyita Crystallin speak during the release of the East Asia and Pacific Economic Update in Jakarta on April 12. (JP/Anton Hermansyah)
T
he World Bank has revised its estimated rate of Indonesian economic growth down to 5.2 percent in its April edition of the East Asia and Pacific Economic Update report, compared to the 5.3 percent set in the January edition of the Indonesia Economic Quarterly.
However World Bank Indonesia economist for macroeconomics and fiscal management Dhruv Sharma said the 10 basis points (bps) decline was largely “mechanical”. The more important thing was that it projected Indonesia's economy would grow in the next three years.
"We have an upward trajectory for Indonesia over the next three years as the economy reached bottom last year," he said in a press briefing in Jakarta on Thursday.
The report forecast 2018 and 2019 gross domestic product (GDP) to grow to 5.3 and 5.4 percent respectively, higher than the 5.02 percent in 2016. That is in line with global economy growth, which is predicted to be 2.7 in 2018 and 2.9 percent in 2019, compared to 2.3 percent in 2016.
World Bank Indonesia acting lead economist Hans Anand Beck said Indonesia's growth will be supported by credit growth and higher oil prices, which also boost commodity prices. "We see developments in the credit markets are supported by demand for financing because of foreign investments," he said.
The credit growth would be supported by a lower credit rate as Bank Indonesia cut its policy rates six times during 2016. However, the transmission to the bank lending rates in the industry would be seen in 2017. (ags)
