A severe global downturn could push Indonesia's growth down to 3.8 percent next year, the World Bank said in a report on Thursday.
The lender forecasts the economy expand 6 percent this year and 6.4 percent in 2013. But in the even of slow growth in trading partner countries, a fall in global commodity prices and reduced investor confidence, Indonesia's economy would grow only 4.7 percent in 2013, it said in a quarterly report.
With risks in the global economy are high and expected to persist, emerging economies, including Indonesia, therefore face the twin challenges of enhancing crisis preparedness to deal with near-term shocks and putting in place policies to support medium-term growth in a weaker global environment.
Like other emerging economies, Indonesia should prepare for a likely long period of global economic volatility and weaker high-income demand by re-emphasizing medium-term development strategies, the bank said.
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