Jakarta, CNBC Indonesia – Indonesia is estimated to be in the top 10 of the world economy in the next 15 years. Indonesia is predicted to be above Russia and South Korea.
It was revealed in the report World Economic League Table 2022 released by CEBR, UK consultancy. The report estimates oThe world’s economic output will exceed US$ 100 trillion for the first time in history next year.
CEBR predicts China will become the world’s largest economy by 2030, two years later than the agency’s report projected last year.
India is said to be overtaking France next year. The UK in 2023 will again embrace the position of the world’s sixth largest economy, the CEBR report said.
“The key issue for the 2020s is how the world economy copes with inflation, which has now reached 6.8% in the US,” said CEBR vice chairman Douglas McWilliams.
“We hope there will be more modest adjustments. If not, then the world needs to prepare for a recession in 2023-2024,” he continued.
CEBR assesses that the world economy in the future will be driven by three main issues, namely how to handle inflation, technology, and the environment.
The shortage of supply and the crisis of distribution vessels will make commodity prices soar in 2021. Energy commodities such as coal, oil and gas are no exception. This has led to high inflation in various energy commodity consuming countries.
Seeing this phenomenon, monetary policy makers responded by reducing the pandemic stimulus and increasing interest rates. This is being done by the Fed, the central bank of the country with the largest economy in the world, the United States (US). The Fed is currently starting to reduce the flow of stimulus with bond purchases and plans to raise interest rates in 2022.
While China is likely to use more administrative means to ‘cool’ their inflation. This is because the property market is very fragile.
Emerging markets may be affected, especially if monetary tightening in the US increases the value of the dollar.
CEBR sees high inflation and the pandemic encouraging the use of technology. One that has a rapid development is alternative energy technology (EBT). An example is the development of electric vehicles.
The use of alternative energy can reduce dependence on fossil fuels which are considered to be actors of climate change. The existence of COP26 further encourages NRE investment which will continue to increase in line with commitments net zero emission.
Indonesia will benefit from the development of NRE because it has an important role in the manufacture of green energy technology. This is because Indonesia is the largest producer of nickel, which is the raw material for electric vehicle batteries. In addition, Indonesia is also an important metal producer in NRE technology such as tin, copper, cobalt and silver.
Meanwhile, Indonesia will occupy the position of the country with the 9th largest economic power in 2034 and two years later it will rise to rank 8.
Currently, Indonesia is ranked as the 16th largest economy in the world. Indonesia is estimated to have a GDP per capita of US$12,967 in 2021.
(ras / ras)
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