Lower Economic Growth Forecast for Indonesia

The World Bank has trimmed its growth for Indonesia from 5.3 percent to 5.2 percent this year, citing global uncertainty and rising inflation. In its quarterly report, the bank said consumption may be burdened by rising inflation because of price hikes in government-set rates like electricity tariffs. If this inflation lingers, consumer spending is seen to be affected and eventually taking a toll on the country’s growth.

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As this happens, the Bank Indonesia may be also left with no choice but to impose tighter monetary policy, which might also shoo away some investments. The World Bank estimates that Indonesia’s inflation will play along the 4.3% level in 2017, up from the 3.5% recorded last year. The yearly inflation target is 3-5%. – BusinessNewsAsia.com

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