Indonesia’s 2018 Economic Growth Fastest Since 2013

Indonesia’s 2018 Economic Growth Fastest Since 2013

Last year, Indonesia’s economy grew at its fastest pace since 2013, data
from Indonesia’s statistics office showed on 6 February.

For 2018, one of ASEAN’s biggest economies booked growth of 5.17
percent—the fastest rate of economic growth in five years, since 2013 .

Economic growth in the fourth quarter stood at 5.18 percent compared to
the same period of 2017, the government’s statistics office said. The
fourth-quarter 2018 growth beat a forecast of 5.11 percent growth in a
Reuters poll. Indonesia’s Q4 growth was also slightly higher than the 5.17
percent annual growth in the third quarter of 2018.

Commenting on Indonesia’s Q4 economic performance, economists at ING
said on 7 February:

“Indonesia posted a better-than-expected 4Q growth of 5.18% to lift full-
year growth to 5.17%, supporting President Jokowi's re-election bid in the
upcoming elections scheduled for April. Consumption helped offset a
substantial trade gap.”

“The economy is seen to enjoy better economic prospects in 2019 with
consumption receiving a boost from cash transfers and with the trade
deficit likely to narrow given the government’s efforts to curb imports,”
ING economists reckon.

According to the World Bank’s quarterly outlook for Indonesia from
December 2018, Indonesia’s real gross domestic product (GDP) growth
was expected at 5.2 percent for 2018 and 2019, a notch higher than in
2017.

“Stronger domestic demand, due to increased social spending and a
strong labor market, is expected to more than offset the drag from the
external sector,” the World Bank said.

Indonesia could become more competitive globally if it boosts exports and
foreign direct investment (FDI) to spur productivity and economic growth,
according to the World Bank.

The bank also issued in December three policy recommendations for
Indonesia: reverse the increase of trade barriers to lower prices for firms
and consumers; conclude free trade agreements to boost market access
for Indonesian products; and reduce restrictions to foreign investors,
which currently limit investment and competition.