ADB lowers Indonesia’s growth forecast for 2023 and 2024. (Photo: thejakartapost.com) Jakarta (VNA) - According to the latest Asian Development Bank (ADB)assessment, Indonesia’s economy is expected to grow by 4.8% in 2023 and5.0% in 2024.
ADB Country Director for Indonesia Jiro Tominaga saidbooming commodity exports drove growth to 5.3% in 2022, making up for modestdomestic demand.
Countries like Indonesia that rely strongly on commodity exports benefited fromhigh prices in 2022 as economies reopened following the COVID-19 pandemic anddrove up demand for metals, fossil fuels and other commodities.
Meanwhile, tensions in Russian and Ukraine and othergeopolitical developments disrupted the supply of some goods and alsocontributed to a rise in prices.
The director acknowledged that global headwinds in2023 are projected to cut export growth, although the current account shouldcontinue to be close to balance. But because private consumption accounts for alarge share of Indonesia’s economy, as consumer spending further normalises andbenefits from the tapering off of inflation, this should put a floor on growth.Investment, however, is likely to remain modest as businesses wait-and-see.
Indonesia's GDP growth was well maintained last year, in stark contrast to thesignificant slowdown in many developed and some emerging economies, theSoutheast Asian country has not been affected when the global inflation keepincreasing.
Besides short-term, the ADB's report also highlighted the “medium- to long-termconcerns with the loss of workers' income and children's in-person schooling during the pandemic that could depress potential growth rates.”./.
