World Bank: Indonesia the Only Major Economy in Asia-Pacific to Surpass Pre-Pandemic Growth

JAKARTA, RAKYAT NEWS – The World Bank has projected that Indonesia will be the only major nation in the East Asia and Pacific region to grow at or above pre-pandemic levels in 2024 and 2025. This sets Indonesia apart from countries like Malaysia, the Philippines, Thailand, and Vietnam, which are all expected to experience growth below their pre-pandemic rates.

“Among the larger countries in the region, only Indonesia is projected to grow at or above pre-pandemic levels in 2024 and 2025,” said Aaditya Mattoo, Chief Economist for East Asia and the Pacific at the World Bank. Mattoo made these remarks during a virtual press conference held in Jakarta on Tuesday.

The World Bank’s East Asia and Pacific Economic Update, released today, highlights Indonesia’s resilience in its latest economic forecast. According to the report, Indonesia’s economy is expected to grow by 5% in 2024 and 5.1% in 2025. This matches Indonesia’s pre-pandemic average growth rate of 5% from 2015 to 2019.

The updated forecast marks an increase from the World Bank’s previous report in April 2024, which had projected growth rates of 4.9% for 2024 and 5% for 2025. The upward revision reflects Indonesia’s positive economic trajectory, bolstered by rising consumer spending, investments, and government expenditures.

The report also outlines the broader economic outlook for the East Asia and Pacific region. Overall, the region is expected to grow by 4.8% in 2024, with a slight slowdown to 4.4% in 2025. The outlook for China, the largest economy in the region, shows a projected decline from 4.8% this year to 4.3% in 2025 due to persistent property market challenges, low consumer confidence, and structural issues like an aging population.

Excluding China, the East Asia and Pacific region is expected to see moderate growth, increasing from 4.7% in 2024 to 4.9% in 2025. This is driven by stronger domestic consumption, a recovery in goods exports, and the return of tourism in various countries within the region.

In addition to Indonesia, other nations in the region have mixed growth prospects. Malaysia is projected to grow by 4.9% in 2024, but this will slow to 4.5% in 2025. The Philippines is expected to see steady growth at 6% in 2024, rising slightly to 6.1% in 2025. Meanwhile, Thailand’s growth is forecasted at 2.4% in 2024, increasing to 3% in 2025, while Vietnam is expected to grow from 6.1% in 2024 to 6.5% in 2025.

For smaller nations, the World Bank forecasts growth driven by domestic factors and the revival of tourism. Cambodia and Laos, for example, are projected to see continued growth, while Pacific Island countries are expected to benefit significantly from tourism, with a forecasted growth rate of 3.5% in 2024 and 3.4% in 2025.

Indonesia’s favorable economic outlook, underpinned by robust domestic demand and strategic investments, signals a promising future. The country’s economic policies, aimed at strengthening domestic consumption and government spending, are expected to sustain its growth momentum in the years ahead. (Uki Ruknuddin)