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

Easing Uncertainty: The World Bank’s Advice for Businesses Amidst Global Unrest and Looming Leadership Changes

The World Bank has advised countries, including Indonesia, to improve policy clarity for businesses as a sustainable method to drive economic growth. This is especially important in the midst of prolonged global uncertainty and limited fiscal and monetary measures. Manuela Ferro, Vice President of the World Bank East Asia and Pacific, emphasized the significance of addressing policy uncertainty, particularly as many countries will be experiencing changes in leadership this year.

Ferro stressed the need for new administrations to communicate their policy directions early to businesses and households. She highlighted the challenges in providing fiscal or monetary stimulus to sustain growth over the long term and underlined the importance of businesses having clarity about the investment regime in which they operate. 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, General Elections Commission announced Prabowo Subianto as the winner of recent polls, set to be sworn in this October along with his running mate Gibran Rakabuming Raka, eldest son of incumbent President Joko “Jokowi” Widodo. The IMF has issued warnings about escalating fiscal risks such as tight financing conditions and growing concerns about debt vulnerabilities. It is crucial for countries to proactively manage these risks to ensure sustainable economic growth.

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