Net exports decline, but what bright spots does Indonesia's economy still reap?

Indonesia's economic achievements in recent times have been supported through the government's macroeconomic policies, attracting foreign investment, and sustainable development.

Indonesia's economy will grow at a steady pace in the coming years (2025) thanks to increased public spending, increased business investment and stable consumer demand. (Source: Indonesia Expat)

The World Bank (WB) stated so in its latest report titled Indonesia Economic Outlook, June 2024 edition.

The WB stated that the prudent and consistent macroeconomic policy framework has become the basis for the success of Indonesia's economic performance, which is recognized by the market.

Credit default swap rates and JP-Morgan emerging market bond index (EMBI) spreads in Indonesia have continued to decline since the Covid-19 pandemic and are lower than some peer countries, the report said.

The credit rating agency also maintained its investment grade rating for the government's credit, with a stable outlook, citing Indonesia's success in weathering external shocks, attracting investment and supporting growth.

It is important to maintain prudent, credible and transparent macroeconomic policies, while creating fiscal space that allows for prioritizing spending on social protection as well as investments in human capital and infrastructure, said Carolyn Turk, World Bank Country Director for Indonesia and Timor-Leste.

Not only that, the WB estimates that the Indonesian economy will grow sustainably at a stable rate in the coming years (2025) thanks to increased public spending, increased business investment and stable consumer demand.

Indonesia's gross domestic product (GDP) growth is forecast to average 5.1% per year from 2024 to 2026, despite facing growing headwinds from falling commodity prices, rising food and energy price volatility, and heightened geopolitical uncertainty.

Indonesia's GDP growth of 5.1% in the first quarter of 2024 remains high and exceeds the average growth rate of middle-income countries.

In addition, private consumption accounted for 57% of GDP growth, reflecting consumer confidence supported by lower non-food inflation, rising civil service wages and good consumer service performance. Public consumption is also expected to rebound in the first quarter of 2024, thanks to elections and social spending, according to Mr. Turk.

"This is a positive reason for the Indonesian economy to grow despite a decline in net exports due to weak global demand and falling commodity prices," the World Bank said.

Source: https://baoquocte.vn/xuat-khau-rong-suy-giam-kinh-te-indonesia-van-gat-hai-thanh-tuu-nho-nhung-diem-sang-nao-276174.html