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IMF sees 'three headwinds' against Indonesian growth next year
The IMF has revised down its 2023 projection for Indonesia's GDP growth by 2 percentage points in view of three geoeconomic impacts that could affect trade in not just Indonesia, but the entire Asia-Pacific.
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A man passes the headquarters of the International Monetary Fund in Washington, D.C. on Oct. 10, 2022, the first day of the IMF and World Bank Annual Meetings. (AFP/Getty Images/Drew Angerer)
T
he International Monetary Fund (IMF) has warned of three major risk factors for Indonesia’s economy: the slowdown in China’s economy, global monetary tightening and the war in Ukraine.
In a hybrid press briefing on Oct. 27, the United States-headquartered institution explained that continued slowdown in China’s real estate market, a key economic sector, would affect the prices of Indonesian export commodities.
Should consumer spending in China slump as a result, then growth in manufacturing and agriculture in the economies of Indonesia and other Asia-Pacific countries would also take a hit.
“Indonesia, being a commodity exporter, has benefited from the current terms of trade,” IMF economist Shanaka Jayanath “Jay” Peiris told reporters.
The country would “be more affected from [...] the investment-side slowdown in China”, he said, and was vulnerable to intensification of the three headwinds.
Read also: Sri Mulyani: Indonesia may benefit from G7 price cap on Russian oil
The fund has revised down its 2023 growth projection for Indonesia’s gross domestic product (GDP) by 0.2 percentage points to 5.0 percent.
