World Bank: Economic Inequality is Still Being A Challenge For Indonesia.

TRIBUNBATAM.id -  The world is facing in many global challenges that affect the economic growth in each country.

In Indonesia, aside from the unfinished escalation of the US-China trade war and other global uncertainties, economic imbalances in various regions remain a challenge.

The World Bank in its latest report said, as many as 6 provinces in Indonesia actually experienced an increase in poverty. Mainly in eastern Indonesia, with the highest province of Papua at 27.5 percent. 

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The inequality rate is very significant, considering that Jakarta has the lowest poverty rate, which is 3.5 percent.

"So despite the latest progress in reducing poverty, inequality in the 6 regions has increased. This imbalance is a challenge for Indonesia," said World Bank Indonesia Chief Economist, Frederico Gil Sander, in Jakarta, Thursday (10/10/2019).

As for the trade war related, Frederico said the world economy would be affected, Indonesia was no exception. Escalating trade war tensions could weigh on regional growth and commodity prices.

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"Therefore it can also have a negative impact on Indonesia's economic growth to contribute to deepening the current account deficit, which is also due to weakening exports," said Frederico. 

Not to mention, he said, the currency was again under pressure because investors rushed to switch portfolios to traditional safe haven assets.

Even higher bond yields affect borrowing costs. Higher borrowing costs could hamper recent credit recovery, and further burden private investment and economic growth.

"If economic growth and investment slow down, it certainly affects the reduction in poverty and inequality," he said. (*) 

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