IMF Projects 5% Economic Slowdown for Indonesia in 2024

International Monetary Fund (IMF)

The International Monetary Fund (IMF) has made a forecast regarding Indonesia’s economic growth, indicating a potential slowdown to 5 percent in 2024.

According to the latest World Economic Outlook report by the IMF, the projected economic growth for Indonesia in 2024 has been revised downward from the previous estimate of 5.1 percent to 5 percent.

However, the IMF maintains its projection for Indonesia’s economic growth this year at 5 percent.

Looking at the broader Asian context, developing economies are anticipated to grow at a rate of 5.3 percent this year, although this growth is aligned with the anticipated decline in export revenues experienced by commodity-exporting nations.

Pierre-Olivier Gourinchas, the Chief Economist of the IMF, remarked that the global economy is expected to gradually recover from the dual impact of the Covid-19 pandemic and the Russia-Ukraine conflict.

For the current year, the global economy is predicted to experience a slowdown, with growth estimated at 3 percent compared to the 3.5 percent achieved in the preceding year.

Pierre stated, “Based on our baseline projections, growth will decelerate from 3.5 percent last year to 3 percent this year.”

The IMF further highlights that the slowdown is primarily concentrated in advanced economies, where growth is expected to decrease from 2.7 percent in 2022 to 1.5 percent this year.

Looking ahead to the following year, economic growth in advanced economies is still projected to remain weak, with an estimated growth rate of 1.4 percent.

Additionally, the European region is expected to face a significant deceleration, which is attributed to the lingering impacts of the sharp increase in gas prices last year, triggered by the Russia-Ukraine conflict.

In contrast, the IMF predicts that growth in developing countries will show an accelerated trend, from 3.1 percent this year to 4.1 percent in the subsequent year. This indicates positive prospects for the economies of developing nations.

As Indonesia navigates its economic trajectory, the IMF’s projections underscore the importance of adopting prudent policy measures and fostering resilience in the face of global challenges.