Economy
Indonesian economy to steadily grow over next two years: World Bank
Indonesia’s economy is expected to steadily grow over the next two years on the back of domestic consumption and investment despite weak exports, a World Bank report said Monday.
Household spending, traditionally a strong contributor to Indonesia’s GDP, and election-related spending helped to expand Southeast Asia’s largest economy 5.11 percent in the first quarter of 2024.
And it is expected to expand five percent overall this year, followed by 5.1 percent in 2025 and 2026, according to the World Bank’s Indonesia Economic Prospects report.
The latest projection was an increase from the Bank’s previous estimates of 4.9 percent this year and next, followed by five percent in 2026.
“The economy is expected to benefit from a pick-up in public consumption and investment but will face headwinds, notably from worsening terms of trade,” the report said.
It noted several risks to the economy, including high interest rates and geopolitical shocks, which could further weigh on exports already impacted by lower prices.
“The outlook is stable, but risks are tilted to the downside,” World Bank senior economist Wael Mansour told a news conference.
“Our baseline (projection) assumes continuity in policy, especially those linked to boosting investment.”
The latest projection assumes a large contribution from public consumption — with government spending expected to increase — while foreign direct investment as a share of GDP is projected to return to pre-pandemic levels, Mansour said.
He added that Indonesia’s “credible” fiscal rule had helped attract investments and lower Indonesia’s risk premiums.
But president-elect Prabowo Subianto, who will take office in October, is reportedly looking to increase the country’s debt-to-GDP ratio to 50 percent — from less than 40 percent — to fund his campaign promises including free school meals.
A member of Prabowo’s campaign team has denied the plan.
The government’s 2025 budget, due by October, is expected to outline an implementation plan for the new administration’s economic goals, and signal its fiscal policy stance.
Expatriate Bangladeshis sent approximately US$ 2.11 billion in remittances during the first 28 days of September in the fiscal year 2024-25, according to data released by Bangladesh Bank on 29 September.
Of this total, state-owned and specialised banks handled $679.10 million, while private banks received $1.43 billion in remittances.
Chief Adviser to Bangladesh’s interim government, Professor Muhammad Yunus, has vowed to expedite reforms and hold elections swiftly. Yunus, who recently assumed the role after the collapse of Prime Minister Sheikh Hasina’s 15-year administration, expressed his commitment during an interview with Tokyo-based news outlet NHK WORLD in New York on Sunday. He was attending the United Nations General Assembly at the time.
Following mass student-led protests that ended Hasina’s long-standing rule in August, Yunus stepped in as the leader of the caretaker government. Known for founding Grameen Bank, an institution providing microloans to the underprivileged, Yunus, along with the bank, earned the Nobel Peace Prize in 2006 for his efforts in poverty alleviation.
During the interview, Yunus emphasized that the interim government’s primary mission is to implement reforms promptly and ensure elections are held as soon as the groundwork is complete. He underscored the importance of success, stating, “Failure is not something that we can accept.”
Addressing the pivotal role of students in the ousting of the Hasina administration, Yunus acknowledged the sacrifices made by young people, referring to their involvement as part of a “revolution.” He highlighted his intention to engage the younger generation in shaping policy.
Furthermore, Yunus called for continued support from Japan, Bangladesh’s largest donor, during this crucial transition period. He stressed that Japan’s assistance is vital to stabilizing Bangladesh’s economy and fostering a democratic foundation in the nation.
Syeda Rizwana Hasan, the Adviser for Environment, Forests, and Climate Change, announced today that steps will be taken to restrict the use of polythene shopping bags to safeguard future generations.
Starting from October 1, polythene bags will be banned in shopping malls, followed by a ban in kitchen markets from November 1.
“Everyone must take responsibility and stop using polythene voluntarily. Action against polythene producers will begin from November 1,” Rizwana Hasan stated during a seminar.
The Department of Environment (DoE) organized the seminar to raise public awareness about alternatives to banned polythene bags.
Rizwana Hasan highlighted that the restriction on polythene will be executed in phases according to legal provisions, and discussions with shopping centers and store owners are ongoing to ensure a smooth transition.
She also announced plans to make the government secretariat a plastic-free zone by December.
Other speakers at the seminar included Environment Secretary Dr. Farhina Ahmed, DoE Director General Dr. Abdul Hamid, Director Rajinara Begum, President of the Shop Owners Association Muhammad Helal Uddin, and Md. Arifur Rahman Bhuiyan, Assistant Professor of Environmental Science at BUP. They discussed the harmful effects of polythene and the need for alternative products.
Earlier, Rizwana Hasan inaugurated a fair showcasing eco-friendly alternatives to polythene bags and visited 24 stalls. The fair featured products from government and private entrepreneurs, including reusable bags, jute bags, paper bags, and items made from bamboo and cane.
