Jakarta: The global economic recovery is expected to exceed previous projections despite the recent uptick of global financial market uncertainty in response to the Delta Covid-19 variant that continues to spread with rapidity in many countries, Bank Indonesia (BI) has stated.
Economic growth is accelerating in the United States (US) and Europe given the rapid vaccination rollout, coupled with fiscal and monetary stimuli, while growth in China remains solid.
The economic outlooks for India and ASEAN have been downgraded, however, in line with the reintroduction of mobility restrictions to overcome a new wave of Covid-19 cases.
“In line with the recovery, BI has upgraded its global economic growth outlook for 2021 to 5.8% from 5.7%,” BI Govenor PErry Warjiyo said on Thursday.
World trade volume and international commodity prices are also expected to rise, thus supporting stronger export performance in developing economies, including Indonesia.
Nevertheless, elevated global financial market uncertainty has been stoked by market concerns over the latest wave of Covid-19 infections and potential fallout in the global economy, together with anticipation of the US Federal Reserve’s tapering policy.
In response, investors are pursuing the flight to quality, hence restraining capital flows and intensifying currency pressures in developing economies, including Indonesia.