World Bank: Indonesia’s economy is facing numerous challenges hinh anh 1

A corner of Jakarta capital (Source: Asialink)


The bank estimated that if the growth rates ofChina and the US fell by 1 percent, it would trim 0.3 percent off the growth ofthe Indonesian economy.

According to Statistics Indonesia (BPS),Indonesia’s economy – the largest in Southeast Asia – expanded by 5.05 percentin the second quarter of this year, softening from 5.27 percent recorded overthe same period last year.

The government expects the economy to grow 5.3percent this year as stated in the 2019 state budget.

The World Bank explained that the bleak outlook forIndonesia was driven by the country’s weak productivity and slowing workforcegrowth.

Lower commodity prices due to the globaleconomic slowdown would also further hurt Indonesia’s economy, the bank said.

With downside risks increasing, Indonesia couldbe susceptible to another episode of capital outflows, which would weakenthe domestic currency, the rupiah, and increase the public debt burden.

The World Bank advised the Indonesian governmentto redirect its efforts to improve the investment climate to attract moreforeign direct investment (FDI)./. VNA