World Bank Raises Indonesia Growth Forecast
The World Bank on Wednesday raised its outlook for Indonesia’s economic growth this year to 4.3 percent, with 5.4 percent growth expected in 2010, offering a more optimistic outlook than the International Monetary Fund did on Monday.
“Indonesia has demonstrated a tremendous dynamic economy in the last three months. We believe economic growth will reach 4.3 percent by the end of the year,” said William E. Wallace, the lead economist in the World Bank’s Jakarta office.
The bank’s forecast matches the government’s prediction for 2009. Its 2010 outlook is higher than the IMF’s 4.8 percent projection made on Monday.
Government ministers questioned the IMF’s 2010 forecast on Tuesday, saying they believed growth would come in at between 5 percent and 5.5 percent.
Domestic demand continued to drive growth in the first half, with the global economy also improving, Wallace said.
The government’s outlays for stimulus, likely to increase by the end of the year, would lift domestic spending, Wallace said. However, he said investment would be slow to expand due to sluggish loan growth - the lowest in three years.
To speed up growth, the World Bank recommended the government form a “regulatory reform commission” that had the power to resolve any contradictory regulations.
“This commission would be crucial in improving coordination,” Wallace said.
The country requires billions of dollars to improve its ailing infrastructure, including power plants and networks, toll roads, bridges, railways, ports and airports.
“Indonesia has demonstrated a tremendous dynamic economy in the last three months. We believe economic growth will reach 4.3 percent by the end of the year,” said William E. Wallace, the lead economist in the World Bank’s Jakarta office.
The bank’s forecast matches the government’s prediction for 2009. Its 2010 outlook is higher than the IMF’s 4.8 percent projection made on Monday.
Government ministers questioned the IMF’s 2010 forecast on Tuesday, saying they believed growth would come in at between 5 percent and 5.5 percent.
Domestic demand continued to drive growth in the first half, with the global economy also improving, Wallace said.
The government’s outlays for stimulus, likely to increase by the end of the year, would lift domestic spending, Wallace said. However, he said investment would be slow to expand due to sluggish loan growth - the lowest in three years.
To speed up growth, the World Bank recommended the government form a “regulatory reform commission” that had the power to resolve any contradictory regulations.
“This commission would be crucial in improving coordination,” Wallace said.
The country requires billions of dollars to improve its ailing infrastructure, including power plants and networks, toll roads, bridges, railways, ports and airports.