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OECD upgrades Indonesia’s two-year GDP growth forecast
The organization upgraded its growth projections by 0.9 percentage points to 4.9 percent this year and by 0.3 percentage points to 5.4 percent next year.
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Organization for Economic Cooperation and Development (OECD) secretary-general Angel Gurría (left) and Finance Minister Sri Mulyani Indrawati attend the release of an OECD survey in Nusa Dua, Bali, on Oct. 10, 2020, on the sideline of the International Monetary Fund–World Bank (IMF-WB) Annual Meeting. (Antara/Nicklas Hanoatubun)
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he Organization for Economic Cooperation and Development (OECD) recently upgraded its economic growth projections for Indonesia on the back of an expected rebound in consumer spending and exports.
In its latest outlook in March, the OECD raised its gross domestic product (GDP) growth projection by 0.9 percentage points to 4.9 percent for this year and by 0.3 percentage points to 5.4 percent for 2022.
“Looking ahead, the OECD projects a return to almost 5 percent growth in 2021 with momentum building up in the coming years,” Ángel Gurría, the outgoing secretary-general of the OECD, said in a virtual presser on Thursday.
“Now, the important factor is the global trade revival, which will help Indonesian exporters, [spending] pick up.”
The upgraded outlook came after Indonesia raised its national economic recovery (PEN) budget by 20.6 percent year-on-year (yoy) to Rp 699.4 trillion (US$48.36 billion) in 2021 as the country rolls out its COVID-19 vaccination program and extends other stimulus programs.
Read also: Govt pledges higher spending boost. This time, it's focusing on health
The government is aiming to inoculate 181 million people by March 2022 as part of a free vaccination drive that began in January. Funds have also been allocated for electricity subsidies, cash transfers and tax breaks, among other initiatives, to spur household spending, which makes up over half of Indonesia’s GDP.
