Country snapshots 2017-18: Indonesia

Growth to edge up

GDP growth has been high and is set to edge up in 2017 and 2018. Government infrastructure spending continues to underpin economic activity, and both private consumption and private investment are showing signs of firming. The current account deficit is projected to be stable. 

The central bank has eased rates six times since the beginning of the year. The government has released a string of reform packages over the past year to improve the business environment, streamline investment and liberalise inward investment. There should be scope for a few more interest rate cuts in the medium term, as inflation is projected to remain subdued. However, the fiscal balance is deteriorating owing to slower growth and low commodity prices. Public expenditure is being reined in to avoid breaching the legal deficit limit of 3% of GDP.    

GDP growth

2013

Current prices IDR trillion

2016

  

2017

% real change

2018

   

9 546.1 5.0 5.1 5.3

Visit www.oecd.org/eco/economicoutlook.htm          

©OECD Observer No 308 Q4 2016          




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