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IMF maintains 5.1% growth estimate for Indonesia amid headwinds
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Security personnel guard the entrance to the International Monetary Fund (IMF) building in Washington D.C., where delegations of 189 members gathered for the 2017 Spring Meetings from Tuesday to Sunday. (JP/Arif Gunawan S.)
W
hile expressing optimism on global economic momentum this year, the International Monetary Fund (IMF) has maintained its estimate for GDP growth in Indonesia.
In its 2017 World Economic Outlook, the IMF set its forecast for Southeast Asia’s largest economy at 5.1 percent, unchanged from its 2016 estimate, affirming the government’s projection at the same level. The IMF sees Indonesia’s annual growth rate at 5.3 percent in 2018.
“I think 5.1 percent is a very good rate in today’s world. Remember we are still living with the legacy from the global financial crisis in the US,” the IMF’s division chief for the Asia and Pacific department, Luis Enrique Breuer, said in Washington on Wednesday.
In its Global Financial Stability report, the fund warned that emerging markets—which include Indonesia—and developing economies remained at risk from a rapid rise in interest rates, US dollar appreciation and lower commodity prices.
Those risks could, according to IMF, exacerbate debt vulnerabilities and trigger the materialization of “contingent liabilities, in particular those related to implicit government guarantees on corporate borrowing."
Amid those uncertainties and challenges, Luis said Indonesia had to implement the right policy mix to reach its 5.1 percent target. “We think that many countries would love to grow by 5 percent. For large countries like Indonesia with GDP that almost [reaches] a trillion dollars, growing 5.1 percent is very fast,” he said.
