World Bank calls on new governments to deliver policy stability for Economy

The World Bank is urging countries, including Indonesia, to improve policy clarity for businesses as a way to drive economic growth amidst limited fiscal and monetary measures. Manuela Ferro, Vice President of the World Bank East Asia and Pacific, stressed the importance of addressing policy uncertainty, particularly in light of changes in leadership that many countries will be experiencing this year. She emphasized the need for new administrations to communicate their policy directions early to businesses and households.

Ferro pointed out the challenges in providing fiscal or monetary stimulus to sustain growth over the long term and highlighted the significance of businesses having clarity about the investment regime in which they operate. She noted that implementing competition-enhancing policies would attract more investors into economic activities. The upcoming elections in many countries, including Indonesia, will have major implications for policy direction and economic growth.

In Indonesia, Prabowo Subianto has been declared the winner of the recent polls and will be sworn in this October along with his running mate Gibran Rakabuming Raka, the eldest son of incumbent President Joko “Jokowi” Widodo. The International Monetary Fund (IMF) has issued warnings about the need for countries to address escalating fiscal risks, including tight financing conditions and growing concerns about debt vulnerabilities. It is crucial for countries to proactively manage these risks to ensure sustainable economic growth.

By Samantha Johnson

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