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RI’s 2023 GDP outlook dims as global trade lags
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A woman walks past a newly constructed pedestrian bridge on Jl. Sudirman in Jakarta on Jan. 6. (Antara/Galih Pradipta)
M
ultiple global institutions have downgraded their expectations for Indonesia's gross domestic product (GDP) growth in 2023 as demand from major trade partners appears set to remain low.
In the December Indonesia Economic Prospect (IEP) report, the World Bank cut Indonesia’s 2023 economic growth outlook to 4.8 percent from its September prediction of 5.0 percent. It also estimated that the economy had grown 5.2 percent in 2022.
While the institution noted that Indonesia’s economy would likely see sustained growth over the next few years, that growth would be “softening” in the short term.
“They're growing, but at a slower pace than before,” World Bank senior economist Wael Mansour said.
Household consumption, which represented 50.38 percent of GDP in the third quarter of 2022, was expected to remain depressed by inflationary pressures this year and grow 4.6 percent, down from the 5.0 percent estimated in 2022.
The institution expected the country’s inflation rate to be around 4.5 percent in 2023.
Government efforts to limit the budget deficit to 3 percent of GDP this year would also constrain fiscal interventions intended to boost purchasing power, Mansour said.
