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Delta outbreak to slow Indonesia’s GDP growth this year: World Bank
The World Bank has revised down its economic growth outlook for Indonesia by 0.7 percentage points to 3.7 percent for this year following the recent outbreak of the Delta variant of the coronavirus but has increased next year’s forecast by 0.1 percentage points to 5.2 percent.
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Medical workers conduct a vaccine drive at Istora Senayan in Central Jakarta on Feb. 4. (JP/P.J.Leo)
T
he World Bank has predicted that the recent outbreak of the Delta variant of the coronavirus will decrease Indonesia’s economic growth this year and will delay its full economic recovery until next year amid vaccination constraints.
The country’s gross domestic product (GDP) is forecast to grow 3.7 percent this year, the World Bank reported on Tuesday, 0.7 percentage points lower than the previous forecast in April. But the bank raised the outlook for next year by 0.1 percentage points to 5.2 percent.
“Indonesia is a country that has encountered severe difficulties in coping with COVID-19, which is why we have seen relatively low growth this year,” Aditya Mattoo, the bank’s East Asia Pacific chief economist, said during an online press conference on Tuesday.
“But we expect growth to recover to as much as 4.5 and 5 percent in the coming years. That is because, fundamentally, the macroeconomic policy environment has remained supportive, and also, Indonesia is implementing the deeper reforms that are necessary.”
The Washington-based lender has downgraded the GDP growth forecasts for most countries in East Asia and the Pacific as a result of the spread of the Delta variant, which has slowed economic activity and has likely increased inequality.
Read also: World Bank says Delta variant slowing economic growth in East Asia and Pacific
China's economy is projected to expand 8.5 percent, while the rest of the region is forecast to grow at 2.5 percent, nearly 2 percentage points lower than in the previous forecast. Myanmar and several Pacific island countries have been hit the hardest, with their GDPs expected to shrink this year.
