Indonesia's Economy Facing Mixed Prospect Post-Elections

Deputy Governor of Bank Indonesia Juda Agung has expressed cautious optimism regarding the global economic outlook for the current year. Global economic growth is projected to be around three percent, marking a decrease compared to 2023 but surpassing earlier forecasts. This positive outlook is attributed to the stronger performance of the United States economy. "What we may need to worry about is on the side of global inflation," Agung stated at the Economic Outlook seminar organized by CNBC Indonesia on Feb 29.

He highlighted the Supplier's Delivery Time Index has witnessed an uptick, signaling a rise in geopolitical tensions. This increase, particularly notable following the Suez Canal crisis, may impede the previously observed decline in inflation and prevent further decreases. Concurrently, uncertainty in the global financial markets remains high, as reflected in the US Dollar Index, now standing at 104, and US Treasury yields exceeding 44.29 percent. "This indicates that the risk of capital flows to emerging markets is still quite high," Agung said. However, domestically, BI sees the general election as potentially providing some positive support to the economy.