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OECD projects 4.7% GDP growth, lower than govt target
The intergovernmental organization notes that while domestic demand is recovering as pandemic restrictions are lifted, rising inflation is depleting consumers' purchasing power.
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OECD secretary-general Angel Gurría (left) and Finance Minister Sri Mulyani Indrawati attend the release of an OECD survey report in Nusa Dua, Bali, on Oct. 10, 2018, on the sidelines of the International Monetary Fund–World Bank (IMF-WB) Annual Meeting. (Antara/Nicklas Hanoatubun)
T
he Organization for Economic Cooperation and Development (OECD) is less positive than the government on Indonesia’s growth prospects for this year.
In a report released on Wednesday, economists at the intergovernmental organization said they expected Indonesia’s GDP to expand by only 4.7 percent in 2022, while the government’s forecast has the domestic economy growing by between 4.8 and 5.1 percent.
The OECD still expects Indonesia to beat global economic growth, which is projected at 3 percent for this year.
The organization noted that while domestic demand in Indonesia was rebounding after the government lifted pandemic-related activity restrictions, rising inflation was hindering the recovery.
“The rise in inflation, however, is already damping consumers’ purchasing power and demand for durable goods,” the OECD stated in a preliminary version of its Economic Outlook.
The organization sees the economy supported by investment regulation reforms, a resumption of tourism and strong – but decelerating – exports of raw materials.
