The Organisation for Economic Cooperation and Development (OECD) has cut its projection for Indonesia's economic growth this year from 5.2 percent to 4.9 percent, while next year's projection is predicted to lower from 5.1 percent to 5 percent. 

The cuts are part of a broader revision to global economic growth projections, which have been cut from 3.3 percent to 3.1 percent this year and from 3.1 percent to 3 percent next year. 

According to the March 2025 edition of the OECD Economic Outlook, economic growth in developing G20 countries has generally slowed. 

China is projected to grow by only 4.8 percent this year and 4.6 percent next year, impacted by President Donald J. Trump's high tariff policies. 

India is expected to grow by 6.4 percent in the 2024-2025 fiscal year and 6.6 percent in the 2025-2026 fiscal year. 

Brazil's growth is expected to slow from 3.4 percent in 2024 to 2.1 percent in 2025, and only 1.4 percent in 2026, due to the impact of monetary tightening and high U.S. tariffs on steel and aluminum exports.

Global inflation to decrease

The OECD also expects global inflation to be lower in the next few years. As for G20 countries, headline inflation is expected to fall from 5.3 percent (2024) to 3.8 percent (2025), and 3.2 percent (2026). 

For advanced G20 countries, core inflation is projected at 2.7 percent (2024), 2.6 percent (2025), and 2.4 percent (2026). 

Meanwhile, for developing countries, annual inflation is expected to fall more sharply, especially in Argentina and Turkiye, which previously experienced high inflation spikes. 

Indonesia case

However, several developing countries are actually experiencing an increase in inflation, including Indonesia and South Africa. 

The cut in Indonesia's economic growth projection reflects the impact of the global economic slowdown, particularly from declining export demand and potential inflationary volatility. 

The government needs to anticipate this trend with more adaptive economic policies, including encouraging domestic investment and maintaining people's purchasing power.