Indonesia’s GDP expected to decline to 4.4% in 2023

The governor of Bank of Indonesia (BI) said that Indonesia’s economic growth may slow to 4.37% next year due to the impact of fiscal tightening in the country.

At last week’s meeting, the BI maintained its 2022 GDP growth forecast, which was revised upward to between 4.5% and 5.3%.

The governor also projected headline inflation of 6.11% by the end of 2022 and 3.61% by the end of 2023.

Last week, the central bank raised its key interest rate for the fourth consecutive meeting to dampen inflation expectations, which the governor said were “too high.” Overall, the BI has raised rates by 1.75 basis points since August.

Annual headline inflation in Indonesia declined to 5.71% in October. However, it remained close to the 7-year high of 5.95% in September and is above the Central Bank of Indonesia’s inflation target of 2% to 4%.

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