World Bank slashes Indonesia growth outlook

constructionsite indonesiaThe World Bank on July 2 downgraded its GDP growth forecast for Indonesia in 2013 to 5.9 per cent from 6.2 per cent. It also predicted that inflation will hike to 7.2 per cent after the government raised fuel prices in June, far higher than the government’s 2013 target range of 3.5 to 5.5 per cent.

The bank said that is sees cooling domestic demand and slowing commodity exports. The Indonesian central bank also just raised its interest benchmark rate, raising concerns that slower loan growth could hurt banks.

Easing investment growth and declining exports are adding to the challenge. The persistent trade deficit contributed to a 3 per cent drop in the rupiah so far in 2013.

Indonesia, Southeast Asia’s largest economy, is a major exporter of key commodities such as palm oil, rubber, coal and tin. But unlike many of its Asian neighbours, the Indonesian economy is primarily domestically focused, with household consumption accounting for more than half of its gross domestic product.

However, increased government spending ahead of the 2014 elections could provide a boost, economists assume.



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The World Bank on July 2 downgraded its GDP growth forecast for Indonesia in 2013 to 5.9 per cent from 6.2 per cent. It also predicted that inflation will hike to 7.2 per cent after the government raised fuel prices in June, far higher than the government’s 2013 target range of 3.5 to 5.5 per cent. The bank said that is sees cooling domestic demand and slowing commodity exports. The Indonesian central bank also just raised its interest benchmark rate, raising concerns that slower loan growth could hurt banks. Easing investment growth and declining exports are adding to the challenge....

constructionsite indonesiaThe World Bank on July 2 downgraded its GDP growth forecast for Indonesia in 2013 to 5.9 per cent from 6.2 per cent. It also predicted that inflation will hike to 7.2 per cent after the government raised fuel prices in June, far higher than the government’s 2013 target range of 3.5 to 5.5 per cent.

The bank said that is sees cooling domestic demand and slowing commodity exports. The Indonesian central bank also just raised its interest benchmark rate, raising concerns that slower loan growth could hurt banks.

Easing investment growth and declining exports are adding to the challenge. The persistent trade deficit contributed to a 3 per cent drop in the rupiah so far in 2013.

Indonesia, Southeast Asia’s largest economy, is a major exporter of key commodities such as palm oil, rubber, coal and tin. But unlike many of its Asian neighbours, the Indonesian economy is primarily domestically focused, with household consumption accounting for more than half of its gross domestic product.

However, increased government spending ahead of the 2014 elections could provide a boost, economists assume.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

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Personal Info

Donation Total: $10.00

 

 

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