Gayatri Suroyo (Reuters), Jakarta, Indonesia – The International Monetary Fund (IMF) has trimmed its economic growth forecast for Indonesia in 2022 to 5.4 percent, down from 5.6 percent previously, it said in a statement on Wednesday.
The IMF kept Indonesia's 2023 growth forecast at 6 percent in its so-called Article IV assessment and described Southeast Asia's biggest economy as "recovering at a brisk pace" from the impacts of the COVID-19 pandemic.
The Washington-based organization had given the 5.6 percent 2022 growth projection in its staff report for Article IV on Jan. 26. Wednesday's statement is the version of that assessment that the IMF board has approved.
The new statement did not explain the downgrade, but it repeated that Indonesia's growth was supported by favorable global commodity prices, the easing of COVID-19 restrictions and rising mobility amid vaccination efforts and continued policy support. It noted that risks remained tilted to the downside.
Indonesia's economy grew 3.7 percent in 2021.
The IMF commended Indonesia's pandemic policy response and plans to restore a fiscal deficit ceiling of 3 percent of gross domestic product in 2023, but urged the central bank to end bond purchases in the primary market – something that Bank Indonesia (BI) has been doing since 2020 to help limit the government's interest costs on debt.
BI, in a statement in response to the assessment, said the IMF's recommendations and economic projections were in line with BI's policy direction and its own assessment of Indonesia's economic recovery.
"Bank Indonesia continues to optimize its policy mix to maintain stability and support a national economic recovery," reads the statement.
In the January report, the Washington-based crisis lender cut its global GDP forecast for 2022 to 4.4 percent, half a point lower than the October estimate, due to the "impediments" caused by the latest outbreak.