Jakarta: The World Bank has once again revised Indonesia's growth outlook for this year. The Indonesian economy is expected to only grow by five percent this year.
World Bank Indonesia's Lead Economist Frederico Gil Sander explained many factors that ultimately led the World Bank to revise Indonesia's economic growth. One of them is increasingly volatile and uncertain global economic conditions.
"It is expected to reach five percent in 2019," Frederico said here on Thursday, October 10, 2019.
However, he explained that Indonesia's economic growth is going to rise again to 5.1 percent in 2020 and 5.2 percent in 2021. He added that Indonesian economy is driven by private consumption, maintained inflation, and a strong labor market.
In addition, the domestic fiscal position and investment growth are expected to improve after the general elections. The business sector is also expected to grow due to the proposed investment policies.
According to him, the escalation of trade tensions creates uncertainties and trade risks.
"Continuing trade disputes can weigh on regional growth and commodity prices. Likewise with Indonesia's economic growth and current account balance, due to weakening exports," he explained.
"Higher bond yields and consequently higher borrowing costs hamper recent recovery activities and will further burden private investment and economic growth," he explained.