The World Bank lauded Indonesia’s recent economic policies, making it resilient against an ailing global economy. The World Bank’s country director for Indonesia, Rodrigo Chaves, said this Monday (June 22, 2016) that the country’s policy packages have helped to strengthen investor’s confidence in Indonesia amidst a slowing demand and volatility in the global financial market.
At the launch of the Indonesian Economic Quarterly’s June 2016 edition in Jakarta Chaves welcomed Indonesia’s recent improvements in its economic policy. Since economic headwinds such as consistently low commodity prices and a sluggish global trade challenge Indonesia - who is a commodity exporter country -, the country could tap increasingly into its potential in the manufacturing and service sector, he added.
The Country’s global share of manufacturing lies with 0.6 percent over the last 15 years and is dominated by assembling and blending. Expanding the service sector and improving the manufacturing would produce better-skilled labors and higher-paying jobs as well as further diversify and therefore strengthen the country’s economy, Chaves explained. Ndiame Diop, the World Bank’s lead economist for Indonesia, agreed, saying that this is the right time to improve Indonesia’s service and manufacturing sectors by further reforms to enhance competitiveness, especially within tourism.
Since private consumption and public spending are expected to further support Indonesia’s economy this year, the World Bank kept its March prediction of 5.1 percent growth for the country. Earlier this month the Bank announced that it downgraded its global growth forecast from previously 2.9 percent to only 2.4 percent.