East Asia’s Rising Star
During another year of global turmoil in 2017, Indonesia was one of the countries bucking the trend. With strong and steady growth and a vibrant young population, Indonesian President Joko Widodo’s government is seizing the opportunity to pursue reforms that will ensure continued dynamism for decades to come.
JAKARTA – At the World Bank Group’s Annual Meetings in Washington, DC, in October, there was notable optimism in anticipation of an upswing in the global economy. The International Monetary Fund’s latest World Economic Outlook projects that global growth will accelerate to 3.6% in 2017, and to 3.7% in 2018. Not surprisingly, investment, trade, industrial production, and business and consumer confidence have continued to increase in several key economies and regions.
Indonesia intends to capitalize fully on this upswing. In 2017, it consistently posted a respectable growth rate of around 5% – better than most emerging economies – owing to increased investment and consumption, and a recovery in exports, partly owing to the pick-up in commodity prices. In fact, exports are becoming an increasingly reliable third engine of growth for the country.
Better still, Indonesia’s macroeconomic indicators are sound. The country is experiencing solid growth in new jobs and real wages, and low and stable inflation of around 4%. Moreover, food prices are steady, consumer confidence is strong, interest rates are low, and the exchange rate has remained consistent. Domestic and foreign direct investment have been picking up, too, thanks to increased infrastructure spending.