ASIATODAY. ID, JAKARTA – The International Monetary Fund (IMF) assesses that Indonesia’s economic growth remains strong amidst external turmoil with inflation maintained at the set target range, and a resilient financial sector.
“Indonesia’s prudent policy framework in both the monetary, fiscal and financial sectors is assessed by the IMF as having created a solid foundation for macro stability and social welfare,” said Head of the Communications Department of Bank Indonesia (BI) Erwin Haryono in Jakarta, Thursday.
Erwin said that Bank Indonesia welcomed the results of the IMF assessment of the Indonesian economy in the 2024 Article IV Consultation report which was released on August 7 2024.
The IMF Board of Directors expressed its appreciation and positive notes regarding the policy steps that have been taken by the Indonesian authorities.
This appreciation was mainly conveyed regarding several important points, namely Indonesia’s commitment to fiscal discipline; reducing inflation in accordance with the predetermined target range and monetary policy that pays attention to data developments (data dependent), market deepening efforts and efforts to strengthen the effectiveness of monetary policy transmission.
The next important point is efforts to strengthen the macroprudential policy framework, the growth agenda towards high-income country status in by 2045, as well as a commitment to achieve a zero emissions target by 2060 and steps taken to limit greenhouse gas emissions and deforestation.
In its report, the IMF projects that Indonesia’s economic performance will remain high, namely 5 percent and 5.1 percent in 2024 and 2025, amidst several risks that need to be watched out for, such as commodity price volatility, slowing growth in major trading partner countries, and spillovers due to tribal conditions, high interest for a long time (high for longer) in global finance.
The IMF provides recommendations to maintain prudent fiscal policy, appreciate the stability of Indonesia’s monetary policy, continue reforms to protect the resilience of the financial sector and support financial market deepening, as well as bridging structural gaps to achieve higher and more inclusive growth potential to support the vision of a Golden Indonesia 2045.
The IMF’s positive projection is in line with Bank Indonesia’s assessment which estimates that the Indonesian economy will continue to grow well and be resilient to the impact of global spillovers.
Bank Indonesia will continue to strengthen policy coordination with the government to mitigate the risk of global uncertainty while maintaining independence in achieving the goals mandated by law.
Monetary and fiscal policy coordination is also strengthened to maintain macroeconomic and financial sector stability as well as economic growth momentum. (ATN)
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