The World Bank cut its forecast for economic growth in Indonesia in 2015 from 5.2 percent year-on-year (y/y) to 4.7 percent (y/y) as private consumption, which accounts for about 55 percent of total economic growth in Indonesia, is estimated to weaken further in the second half of 2015 while government spending has been lower than expected (causing subdued fixed investment). Furthermore, persistent low commodity prices and tighter credit conditions provide further pressures that led to the extreme downward revision.

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In the World Bank’s East Asia and Pacific Economic Update, released on Monday (13/04), the Washington-based institution revised down its economic growth forecast for Indonesia to 5.2 percent (y/y) in 2015, down from 5.6 percent in its October 2014 Update. Main reasons for this downgrade is that Indonesia’s export performance remains weak amid the sluggish global economy, including weak demand from China (Indonesia’s largest trading partner). Meanwhile, Indonesia’s domestic consumption is curtailed by high interest rates.

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In the latest edition of the East Asia Pacific Economic Update, released on Monday (13 April 2015), the World Bank revised down its economic growth forecast for developing East Asia & China to 6.7 percent year-on-year (y/y) in 2015 and 2016 from its previous assumption of 6.9 percent growth (y/y) in 2015 and 6.8 percent (y/y) in 2016. The main reason for this downward revision is the global uncertain economic context, which includes the impact of looming higher US interest rates and the appreciating US dollar.

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On 22 March 2015, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic matters such as an analysis of the rupiah performance, an analysis of why Bank Indonesia kept its key interest rate at 7.50 percent, a World Bank update on Indonesia, the trade balance, Islamic finance, reforms, and more.

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The World Bank released its latest Indonesia Economic Quarterly report on 18 March 2015. In this report, entitled ‘High Expectations’, the World Bank states that it praises the early reform progress in several key areas such as fuel subsidies as well as more key reforms that are underway. This raises high expectations about the Indonesian economy in the middle and longer term. However, the government also faces challenges to implement further complex structural reforms amid subdued growth prospects.

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After the World Bank released a rather gloomy forecast for global economic growth on Tuesday (13/01) while crude oil prices continue to fall, global commodity prices have become under pressure on Wednesday’s trading day. In its latest Global Economic Prospects report, the World Bank said that the global economy will grow 3 percent year-on-year (y/y) in 2015, down from its previous estimate of 3.4 percent (y/y). Its growth forecast for economic growth in 2016 was also revised down from 3.5 percent (y/y) to 3.3 percent.

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Despite slowing economic growth in China (the world’s second-largest economy), the World Bank forecasts higher economic growth for emerging markets in 2015 driven by a decline in global oil prices, a stronger US economy, and continued low global interest rates. The World Bank expects to see a 4.8 percent year-on-year (y/y) GDP growth rate in emerging markets this year, up from an estimated 4.4 percent (y/y) in 2014. Meanwhile, the global economy is expected to grow 3 percent (y/y) in 2015.

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On Monday (08/12) the World Bank released the December edition of its Indonesia Economic Quarterly, entitled ‘Delivering Chance’. In the report the World Bank cut its forecast for economic growth in Indonesia next year to 5.2 percent (y/y), from 5.6 percent (y/y) in the July edition of its flagship publication, due to weaker investment growth and sluggish exports. Indonesia’s GDP growth in 2014 is projected at 5.1 percent (y/y), slightly below the World Bank’s previous estimate of 5.2 percent.

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A recent World Bank report focuses on the impact of the Teacher Law and its reforms, on teacher knowledge, skills, and motivations in Indonesia. The report also looks at student learning outcomes. In 2005, the Indonesian government had passed the Teacher Law in an effort to improve education in Southeast Asia’s largest economy, specifically by raising the quality of Indonesian teachers. Under the new law, teachers must complete a four-year college degree to obtain certification, and continue to improve their skills.

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The World Bank revised down its forecast for economic growth in Indonesia for the year 2014. In the July 2014 edition of the Indonesia Economic Quarterly, the institution projects economic growth in Southeast Asia’s largest economy at 5.2 percent, slightly down from its previous forecast of 5.3 percent. The downgrade is the result of a weaker outlook for commodity prices and tighter credit conditions. Moreover, the growing fiscal deficit contributes to the challenges that will be faced by the new government (which will be inaugurated in October 2014).

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In the second half of September 2018 the World Bank released its latest Indonesia Economic Quarterly (abbreviated IEQ), titled “Urbanization for All”. The IEQ, a flagship publication of the Washington-based institution which (at least in our view) is among the most interesting reports that are on a regular basis published about the Indonesian economy, has two main aims. Firstly, it informs about the key developments that occurred in Indonesia’s economy over the past three months, and places these developments in a longer-term and global context. Secondly, the IEQ provides an in-depth examination of selected economic and policy issues and an analysis of Indonesia’s medium-term development challenges.

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In the April 2018 edition of its East Asia and Pacific Economic Update, the World Bank is cautiously optimistic about economic growth in developing East Asia and Pacific (EAP). After a better-than-expected global economy in 2017, growth in developing EAP is expected to remain stable in 2018, reflected by solid prospects in Thailand and several commodity exporters, notably Indonesia. Domestic demand is estimated to remain robust in most of the region's economies and continue to underpin growth in 2018 and beyond. However, with economies operating close to their potential, price pressures are expected to rise.

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The World Bank released the latest edition of its flagship publication Indonesia Economic Quarterly on Tuesday (27/03). The March 2018 edition of the report is entitled "Towards Inclusive Growth". In the report the World Bank is positive about Indonesia's economic outlook after seeing the nation's real gross domestic product (GDP) growth picking up at 5.2 percent year-on-year (y/y) in the fourth quarter of 2017 (accelerating from 5.1 percent y/y in the previous quarter).

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In the World Bank's January 2018 edition of its Global Economic Prospect (GEP) report, released earlier this week, Indonesia's economic growth is considered stable at 5.3 percent year-on-year (y/y) in the 2018-2020 period. Although compared to emerging peers in the Asian region, a 5.3 percent growth pace is not too impressive, the positive message from the GEP report is that - contrary to many emerging Asian peers - Indonesia is not expected to see sliding economic growth in the years ahead.

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A new World Bank report, entitled "Indonesia's Global Workers: Juggling Opportunities & Risks", discusses the attractive opportunities for Indonesian workers to decide to migrate and work abroad. However, the report also notes that it is important for Indonesian authorities to reform its labor migration system to allow those Indonesians who want to work abroad can access better paid jobs, while their protection can be improved.

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In its latest report, the World Bank stated that Indonesia's macroeconomic fundamentals are solid and have been strengthening amid the central government's eagerness to implement critical structural reforms, while investment growth rose to the highest levels since the last quarter of 2015 (mainly investment in buildings and structures).

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The latest World Bank projection shows the economy of Indonesia remains promising despite the Washington-based institution having lowered its forecast for Indonesia's full-year 2017 gross domestic product (GDP) growth by 0.1 percentage point to 5.2 percent year-on-year (y/y) in the June 2017 edition of its Global Economic Prospect. The World Bank emphasized the Indonesian economy remains relatively strong and is among the most promising emerging markets.

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Indonesia climbed 15 places in the World Bank's Ease of Doing Business index 2017 from 106 to 91, hence being among the ten biggest climbers. Overall, the World Bank saw a record 137 economies around the globe adopting key reforms that make it easier to start and operate small and medium-sized businesses. The World Bank released its latest index, titled “Doing Business 2017: Equal Opportunity for All” on Wednesday (26/10).

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In the October 2016 edition of its flagship Indonesia Economic Quarterly (IEQ) report, titled "Easing Pressures", the World Bank is positive about Indonesia's improved fiscal management and its impact on the nation's gross domestic product (GDP) growth. The Washington-based institution projects Indonesia's economic expansion at 5.1 percent (y/y) in 2016. However, it emphasizes that external risks (sluggish global economic growth and global market volatility) continue to pose a threat.

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A new financial management system was launched in April 2015 by the Indonesian government. This new system, called Sistem Perbendaharaan dan Anggaran Negara (abbreviated SPAN), aims to enhance public efficiency, transparency and accountability in Indonesia by managing the financial transactions of more than 24,000 government spending units in all 33 provinces. According to a new World Bank story, Indonesia's new financial system has managed to improve efficiency, transparency and accountability. Moreover, it improves budget planning and spending.

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