Publication: Indonesia Economic Prospects, June 2024: Unleashing Indonesia’s Business Potential
Loading...
Other Files
2,325 downloads
Date
2024-06-24
ISSN
Published
2024-06-24
Author(s)
Editor(s)
Abstract
At 5.1 percent in Q1-2024, GDP growth remains resilient surpassing the middle-income countries’ average. Robust private consumption accounted for 57 percent of GDP growth. This reflects consumer confidence supported by softening inflation in nonfood products, the hike in civil servant wages, and robust performance in consumer services. Public consumption rebounded in Q1-24 driven by election related and social spending. This rebound outweighs the negative contribution to growth of net exports as weak global demand and commodities price volatility have dampened exports earnings.
Link to Data Set
Citation
“World Bank. 2024. Indonesia Economic Prospects, June 2024: Unleashing Indonesia’s Business Potential. © World Bank. http://hdl.handle.net/10986/41764 License: CC BY-NC 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Indonesia Economic Quarterly, June 2011(Washington, DC, 2011-06)Indonesia's economic performance through mid-2011 has been positive. Solid growth has been accompanied by further portfolio capital and foreign direct investment inflows. Public and financial sector balance sheets remain strong. However, events over the past quarter serve as a reminder of a number of Indonesia's ongoing policy challenges. At the same time, the launch of the government's master plan 2011-2025 has focused attention on the investments and policy reforms which can help Indonesia reach its future growth potential. Finally, heightened international risk aversion originating from the Greek debt crisis, and the potential market implications of any haircut, were it to occur, are a reminder of the external shocks which could prompt reversals of short-term capital flows to Indonesia. However, events over the past quarter are a reminder of the current challenges which are faced and the need to put in place, and implement, the policies and investments necessary for Indonesia to reach its potential as a leading global growth driver of the next few decades.Publication Global Economic Prospects, June 2011(2011-06)The global financial crisis is no longer the major force dictating the pace of economic activity in developing countries. The majorities of developing countries has, or are close to having regained full-capacity activity levels. As a result, country-specific productivity and sartorial factors are now the dominant factors underpinning growth. Macroeconomic policy in developing countries needs to turn toward medium-term productivity enhancements, managing inflationary pressures re-establishing the fiscal and monetary cushions that allowed most developing countries to come through the crisis so well. In contrast, activity in high income and some developing European countries continues to struggle with crisis-related problems, including banking-sector, fiscal and household restructuring. The remainder of this report is organized as follows. The next section discusses recent developments in global production, trade, inflation, and financial markets, and presents updates of the World Bank's forecast for the global economy and developing countries. This is followed by a more detailed discussion of some of the risks and tensions in the current environment, and a short section of concluding remarks. Several annexes address regional and sartorial issues in much greater detail.Publication Middle East and North Africa Economic Developments and Prospects 2005(Washington, DC, 2005-04-01)The edtion of the Middle East and North Africa (MENA) economic developments and prospects reportsanalyzes the region's short-term growth prospects given global forecasts and current structural features of the economies, as well as the region's prospects for longer-term growth based upon progress in implementing comprehensive structural reforms. MENA region has experienced exceptional growth over the last two years. Over 2003 and 2004, economic growth in MENA averaged more than 5.6 percent a year, the strongest growth in a decade, and up strongly from the 3.6 percent average yearly growth over the 1990s. On a per capita basis, the MENA region's 3.5 percent average growth over the last two years was the region's strongest growth performance since the mid-1970s. Accompanying this strong growth performance, unemployment has declined with the rise in oil prices over 2000- 2004. Unemployment is estimated to have fallen from about 14.9 percent of the labor force in 2000 to 13.4 percent currently, the result of a 37 percent increase in the rate of employment creation over the 1990s. In many respects, the MENA region is in the midst of an economic boom. However, there are caveats to the region's growth acceleration. For one, it has not been especially broad based. Comparing growth over the 1990s with growth over the last two years, 97 percent of the regional growth upturn was driven by just four countries - Saudi Arabia, the Islamic Republic of Iran, Algeria and the United Arab Emirates. In fact, nearly half of the region actually experienced growth downturns relative to the 1990s. Moreover, MENA's recent positive economic developments have been driven largely by external events - in particular, dramatically rising oil prices. And importantly, on a per capita basis, the MENA region's growth over the last two years continues to lag that of other regions, a reflection of both the firming of GDP growth rates across developing regions and the MENA region's high population growth.Publication Global Economic Prospects, June 2024(Washington, DC: World Bank, 2024-06-11)After several years of negative shocks, global growth is expected to hold steady in 2024 and then edge up in the next couple of years, in part aided by cautious monetary policy easing as inflation gradually declines. However, economic prospects are envisaged to remain tepid, especially in the most vulnerable countries. Risks to the outlook, while more balanced, are still tilted to the downside, including the possibility of escalating geopolitical tensions, further trade fragmentation, and higher-for-longer interest rates. Natural disasters related to climate change could also hinder activity. Subdued growth prospects across many emerging market and developing economies and continued risks underscore the need for decisive policy action at the global and national levels. Global Economic Prospects is a World Bank Group Flagship Report that examines global economic developments and prospects, with a special focus on emerging market and developing economies, on a semiannual basis (in January and June). Each edition includes analytical pieces on topical policy challenges faced by these economies.Publication Global Economic Prospects, June 2012(Washington, DC, 2012-06)The year began on a positive note. A marked improvement in market sentiment, combined with monetary policy easing in developing countries, was reflected in a rebound in economic activity in both developing and advanced countries. Industrial production, trade and capital goods sales all returned to positive territory, following the slow growth of the fourth quarter of 2011. Although debt levels in developing countries are lower, several countries (notably Jordan, India, and Pakistan) must reduce their structural fiscal balances to reduce debt to 40 percent of Gross domestic Product (GDP) by 2020 (or prevent debt-to-GDP ratios from rising further). As a result, sharp swings in investor sentiment and financial conditions will continue to complicate the conduct of macroeconomic policy in developing countries. In these conditions, policy in developing countries needs to be less reactive to short-term changes in external conditions, and more responsive to medium-term domestic considerations. A return to more neutral macroeconomic policies would also help developing countries reduce their vulnerabilities to external shocks, by rebuilding fiscal space, reducing short-term debt exposures and recreating the kinds of buffers that allowed them to react so resiliently to the 2008/09 crisis.
Users also downloaded
Showing related downloaded files
Publication Business Ready 2024(Washington, DC: World Bank, 2024-10-03)Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.Publication Indonesia Economic Prospects, December 2024(Washington, DC: World Bank, 2024-12-19)Indonesia’s economy remains resilient, buoyed by strong domestic demand and a recovering service sector. The current account deficit widened, driven by moderating terms of trade and cyclical factors that intensified services and income outflows. After two years of consolidation, the fiscal policy stance loosened slightly. Meanwhile, Bank Indonesia (BI) has been incrementally easing its policy stance while managing currency stability. Indonesia needs to significantly increase tax revenues to investment in human and physical capital to achieve its high-income status ambitions. The country’s public capital stock lag regional and structural peers, falling far short of advanced economies. Closing these gaps could enhance productivity growth and support the sustained 6 percent growth required to reach high-income status by 2045. However, the investment needed is substantial. A significant portion of this must be financed through increased tax revenues, as a substantial rise in debt would be risky and would violate statutory caps on deficit and debt levels. Overall, increasing tax revenues will require reforms that widen the tax base, improve tax administration, and address structural constraints to compliance. Reforms to widen the tax base could lower the registration threshold for VAT to align with middle-income country norms, which also applies to the temporary final tax for MSMEs. Meanwhile, a permanent final tax regime could be introduced for MSMEs below the threshold. Special CIT treatments, such as for construction services, publicly listed firms, and non-standard VAT exemptions, may be phased out gradually. Tax incentives need to become more strategic, time-bound, and systematically reviewed. Improving compliance requires better risk management, using high-quality third-party data and integrating fragmented government systems. Simplifying and clarifying VAT regulations can reduce disputes and administrative burdens. Lastly, addressing structural constraints involves deepening financial sector depth, which is expected to have the secondary effect of facilitating compliance through improved information and formalization.Publication Country Partnership Framework for the Republic of Indonesia for the Period FY21 - FY25(Washington, DC: World Bank, 2021-04-06)This document presents the Country Partnership Framework (CPF) for the World Bank Group (WBG) for Indonesia, covering the period FY2021-FY2025. The CPF builds on past successes and blends continuity of the past strategy with change. The past strategy began shifting towards supporting private sector-led growth, based on investments in human capital and underpinned by institutional reforms. This CPF proposes a further shift towards reinforcing fiscal resilience, harnessing the potential of digitalization, integrating climate change considerations, and realizing the contribution of gender to promote a resilient recovery from the pandemic and long-term economic growth. Current conditions require re-focused knowledge and advisory work, inter alia, in public finances, governance, health and social protection as well as a rise in the volume of IBRD lending and IFC financial support tilted towards these re-defined priorities. This document details the CPF program for the first three years of the CPF period in light of unusually great uncertainties, within a five-year overall framework. The first half of the CPF period will be dominated by the need to secure a sustained recovery from the COVID pandemic.Publication World Bank East Asia and Pacific Economic Update, April 2025: A Longer View(Washington, DC: World Bank, 2025-04-24)East Asia and Pacific (EAP) outpaced most regions in economic growth in 2024. To sustain this momentum and generate jobs, EAP countries must navigate global uncertainty and tackle long-term challenges tied to shifting global integration, climate change, and demographic trends. In its 2025 Regional Economic Update, the World Bank projects that growth in EAP will slow down to 4.0 percent in 2025, compared to 5.0 percent in 2024. Uncertainty around these projections remains high, and growth outcomes will depend on global developments and national policy choices.Publication Indonesia Country Climate and Development Report(World Bank, Washington DC, 2023-04-28)Climate challenges in Indonesia are intertwined with the country’s growth and development trajectories. Indonesia’s Country Climate and Development Report (CCDR) takes a historical look at climate and development challenges in Indonesia to: (i) present a baseline for the future low-carbon and climate-resilient journey; and (ii) develop a framework to illustrate climate-growth dynamics. The framework is centered around Indonesia’s abundant supply of carbon-intensive natural resources-land and energy-matched by high demand for those resources in parts of the economy that drive growth-agriculture, urban expansion, industry, transportation, and trade. The resulting emissions have direct and indirect costs. They erode climate resilience and increase costs from climate shocks. Rising carbon content in the economy also imposes sunk costs for the low-carbon transition. Although these challenges are known, and efforts are being made to tackle them, the framework aims to link these economy-wide issues to the ongoing and future reforms that are discussed in the CCDR.