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  • Publication | 2023

Indonesia Economic Prospects December 2023: Climate Action for development

Global Food and Nutrition Security

Highlights:

  • Indonesia has been successful in navigating the macroeconomic fallout from asynchronous global shocks.
  • GDP growth remains strong though the economy is yet to fully recover to its pre-pandemic trajectory.
  • Inflation has been brought under control following the effects of the energy price shocks in 2022, though new pressures are emerging from food supply risks and renewed oil price rises. Headline inflation declined for seven successive months to 2.6 percent yoy in October.  Nonetheless, the prices of some basic food items (rice, sugar, and chicken meat) have been rising lately owing to a combined effect of supply and feed shortages. Food inflation rose to 5.5 percent in October, despite favorable horticulture harvests. Prolonged unfavorable climatic conditions from El Niño have affected the production of staple crops among others. To contain domestic food prices and soften the impact on the poor, the government of Indonesia (GoI) introduced several price stabilization measures and food aid programs.
  • The Indonesia Economic Prospects looks as well at how Indonesia could address climate change while achieving higher GDP growth over the long- term.