World Bank projects economy to grow 5.2% this year

World Bank projects economy to grow 5.2% this year


Jakarta — The World Bank has projected the economy to grow 5.2 percent this year, higher than the government’s projection of 5.18 percent. The bank said private consumption was estimated to strengthen, while investment would also grow positively. In the first quarter of 2018, private consumption and investment grew at 4.95 percent and 7.9 percent respectively, according to the bank. “The investment growth is still high, considering the increasing price of commodities,” said World Bank country director for Indonesia Rodrigo A. Chaves at the Indonesia Stock Exchange in Jakarta on Wednesday (06/06). However, investment growth would increase the import volume of raw materials that would burden the Indonesian economy because the country could not expect to boost its exports due to protectionist policies of other countries, he added. Chaves said the global economy would grow slower due to tightening monetary conditions and the emergence of financial volatility centered in developing countries such as Argentina and Turkey. According to the World Bank, the current account deficit will widen due to high demand in domestic market, weak trade conditions and sluggish global economic growth. Its estimates for Indonesia include inflation at 3.5 percent, a current account balance of -2.0 percent and a government budget balance of -2.1 percent.