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Bloomberg
The World Bank projects Indonesia’s economic growth will slide to below 5% next year and warned of “severe†outflows if global risks worsen.
The forecasts were made in a presentation to Indonesian President Joko Widodo, according to two people with knowledge of the matter, who didn’t want to be identified because the discussions were private.
The presentation slides — which were dated September and seen by Bloomberg — show a growth forecast for next year of 4.9 percent, which would be the slowest pace since 2015. That’s lower than the bank’s current projections of 5.1 percent for this year and 5.2 percent for 2020, published in its June quarterly report on Indonesia. The government sees growth of 5.1 percent in 2019 and 5.3 percent in 2020.
A spokesman for the World Bank in Jakarta declined to comment on the report.
The US-China trade war and geopolitical risks are intensifying, with “flashpoints everywhere†from Brexit to protests in Hong Kong to the US elections next year, the World Bank said in its presentation. These risks have the potential to cause “a negative economic shock†with “severe portfolio capital outflows†that could be larger than anything seen in the past decade, it said.