Indonesia's Economy Grows 6.5 Percent

By : Herry Barus And Aldo Bella Putra | Wednesday, February 07 2018 - 22:00 IWST

Dirut Bank Mandiri Kartika Wirjoatmodjo dan Menkeu Sri Mulyani (Foto Rizki Meirino)

INDUSTRY.co.id - Jakarta - Indonesia's economy has the potential to grow to 6.5 percent (year-on-year / yoy) in the medium term or in 2022 with structural reforms that will increase productivity and attract investment for development finance.

"Reforms in fiscal and other structural reforms show the potential for economic growth to reach 6.5 percent in the medium term," the International Monetary Fund (IMF) said in its Consultation Report IV for Indonesia 2017 concluded at a meeting of the IMF Board of Directors, and quoted by Antara in Jakarta, Wednesday (7/2/2018).

The IMF appreciates the Indonesian economy and welcomes the focus of the short-term policy mix between authorities to promote growth, while also maintaining stability.

Government expenditure allocated to priority sectors is also highlighted by the IMF, as well as the growing investment that increases funding sources for infrastructure development in Indonesia.

The IMF stresses that all fiscal reforms and other structural reforms should be a priority, in order to eventually increase state revenues to support development financing needs.

IMF Board of Directors concludes that the outlook for the Indonesian economy is positive, but still needs to be alert to risks.

Governor of Bank Indonesia Agus D.W. Martowardojo welcomes the results of the IMF assessment.

Agus assess IMF assessment in accordance with the study of the Central Bank which believes that the resilience of the Indonesian economy is getting stronger.

The indicator, inflation during 2017 was at a low level of 3.61 percent (yoy).

"The maintained inflation at such a low and stable level provides an atmosphere conducive to strengthening the momentum of domestic economic recovery," he said.

Economic growth in 2017 reached 5.07 percent supported by improved infrastructure investment by the government and the role of private investment. In addition, improved resilience is characterized by a healthy current account balance and high inflows of foreign capital, as well as stable exchange rate.

"The Central Bank considers that there is an opportunity to create stronger and sustainable domestic economic growth through strengthening the implementation of structural reforms," said Agus.