IMF-World Bank Meeting: Indonesia’s Robust Economic Virtue
The International Monetary Fund and World Bank initiated their Spring Meeting in Washington, D.C., on Monday (4/10). Subsequently, the latest World Economic Outlook report was published, updating a few details about the economic growth. Its contents indicate that the global economy remains far from achieving the same growth rates as before the COVID-19 pandemic. The baseline forecast predicts that the growth rate will decrease from 3.4% in 2022 to 2.8% in 2023 before stabilizing at 3.0% in 2024. Advanced economies are expected to experience a significant decline in growth, from 2.7% in 2022 to 1.3% in 2023. In addition, the occurrence of heightened stress in the financial sector could lead to a scenario where the global growth rate falls to around 2.5% in the same year, and the growth rate in advanced economies dips below 1%. The IMF released its Article IV report in mid-March, revising Indonesia's economic growth target for 2023 from an earlier estimate of only 4.8% to 5%. Meanwhile, the World Bank raised its projection for Indonesia's economic growth from 4.8% to 4.9%. The IMF considers that the risks to Indonesia's economy are fairly balanced. Positive factors for the Indonesian economy, such as China's recovery and easing global inflation pressures, could strengthen the demand for Indonesian exports. The World Bank has stated that high inflation can decrease private-sector consumption. At the same time, high-interest rates and uncertainty in external economic factors can hinder private investment growth.