World Bank calls on new governments to deliver policy stability for Economy

The World Bank is urging countries, including Indonesia, to prioritize policy clarity for businesses as a sustainable method to drive economic growth. This advice comes amid the global uncertainty and the limited fiscal and monetary measures that many countries are facing. Manuela Ferro, the Vice President of the World Bank East Asia and Pacific, emphasized the importance of addressing policy uncertainty, particularly as many countries will be experiencing changes in leadership this year. She urged new administrations to communicate their policy directions early to businesses and households.

Ferro highlighted the challenges in providing fiscal or monetary stimulus to sustain growth over the long term and underscored the significance of businesses having clarity about the investment regime in which they operate. She pointed out that implementing competition-enhancing policies would attract more investors into economic activities. The upcoming elections in many countries, including Indonesia, will have significant implications for policy direction and economic growth.

In Indonesia, Prabowo Subianto has been declared the winner of recent polls and is set to be sworn in this October along with his running mate Gibran Rakabuming Raka, the eldest son of incumbent President Joko “Jokowi” Widodo. The IMF has issued warnings about rising fiscal risks, including tight financing conditions and growing concerns about debt vulnerabilities. It is crucial for countries to proactively manage these risks to ensure sustainable economic growth.

The World Bank’s advice on policy clarity is vital for businesses operating in uncertain environments. With clear policies in place, companies can make informed decisions about investments and expansion plans. Additionally, addressing policy uncertainty can help build confidence among investors and increase foreign direct investment flows into an economy.

In conclusion, improving policy clarity for businesses is a sustainable method for driving economic growth. Countries facing limited fiscal and monetary measures must pay attention to this advice even more acutely. In Indonesia’s case, new leadership must prioritize clear communication of their policy directions early on to maintain investor confidence and drive economic growth.

Indonesia’s upcoming elections have major implications for its future direction and potential impact on its economy. As such, it is crucial for political leaders to address fiscal risks proactively through responsible financial management practices that promote sustainable economic growth.

In conclusion, improving policy clarity for businesses is essential in uncertain times when governments face limited resources to stimulate economic growth. New administrations must prioritize clear communication of their policies early on while managing fiscal risks responsibly to ensure sustained growth in their economies.

By Sophia Gonzalez

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