Indonesia can take a breather, as widely anticipated changes in US economic policies will need some time to materialize, according to lender Standard Chartered.

“2017 will be a year of planning and transition [for the US],” said Mike Moran, who heads Standard Chartered’s economic research for the Americas.

Any fiscal policy changes proposed by the new Donald Trump administration would take time to be discussed in Congress and to eventually take effect, he told a media briefing in Jakarta on Monday.

Impacts on the economy would be delayed until at least 2018, which Standard Chartered estimated would provide room for the US Federal Reserve to postpone its plan to raise interest rates several times this year.

Standard Chartered projects only one increase by 25 basis points (bps) to occur in December, below the market’s expectation of between two and three hikes this year.

It projects another four hikes in 2018, lifting the federal funds rate to 2 percent, before stagnating in 2019.

Fed chairwoman Janet Yellen stated after the Federal Open Market Committee (FOMC) meeting in December that her office saw three rate hikes in 2017 instead of the two foreseen in September, Reuters reported.

The meeting unanimously decided to increase the rate by 25 bps following Trump’s election as president, which they said had put the central bank under a “cloud of uncertainty”.

Trump has pledged to boost infrastructure development and implement protectionist trade policies. The measures are expected to boost the US economy, which is already showing signs of recovery, and increase inflation.

However, Yellen noted on Thursday that “allowing the economy to run markedly and persistently ‘hot’ would be risky and unwise” and said she considered “it prudent to adjust the stance of monetary policy gradually over time”, as reported by Bloomberg.

Given the projected dovish monetary policy stance by the Fed, Standard Chartered expects to see Indonesia’s economy expand by 5.3 percent this year, faster than the 5.1 percent assumed in the 2017 state budget.

It estimates last year’s economic growth at 5.1 percent, above the government’s revised target of 5 percent. GDP growth was 5.02 percent year-on-year in the third quarter, while the fourth-quarter figure has yet to be announced by the Central Statistics Agency (BPS).

Domestic consumption will remain the largest contributor to GDP, accounting for more than 50 percent, as rallies in commodity prices will help jack up people’s purchasing power.

Meanwhile, government spending will be stronger than last year, because of increasing revenues and a stronger focus on infrastructure development.

“This year’s state budget is safer than last year’s, as the projected tax revenue is more achievable,” Standard Chartered economist Aldian Taloputra said.

The inflation rate is projected to hover at around 4.3 percent, higher than the 3.02 percent recorded last year, mainly driven by higher administered prices.

On the monetary side, Standard Chartered expects Bank Indonesia (BI) to keep its benchmark interest rate unchanged at 4.75 percent to face inflation and looming global uncertainty.

The central bank is expected to rely on a mix of liquidity and macroprudential policy measures rather than on its monetary policy tools.

However, the possibility of a stronger US dollar may put pressure on emerging market currencies, including the rupiah.

“Rp 13,500 to Rp 14,000 per dollar is the range where the rupiah will trade this year. BI will be able to manage the volatility,” Standard Chartered’s Asia forex strategist Divya Devesh said, adding that the rupiah was in a very good position, supported by a managed current account deficit, benign inflation and ample foreign exchange (forex) reserves.

The forex reserves amounted to US$116.4 billion as of December, 10 percent higher than a year earlier, BI data show.

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