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Jakarta Post
The Jakarta Post
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Visiting IMF team projects 5.1 growth, lower than previous projection

  • News Desk
    News Desk

    The Jakarta Post

Jakarta | Wed, November 15, 2017 | 02:37 pm
Visiting IMF team projects 5.1 growth, lower than previous projection Dock workers are seen at North Jakarta's Tanjung Priok container port in this file photo. An IMF team that visited Indonesia on Nov. 1-14 has readjusted this year's growth projection to 5.1 percent and 5.3 percent for 2018, mainly on the back of higher exports and investment. (The Jakarta Post/Stefani Ribka)

A visiting International Monetary Fund (IMF) team has projected that the Indonesian economy will grow 5.1 percent this year, slightly lower than the Fund’s previous projection of 5.2 percent released on Oct. 10.

The IMF team, led by Luis E. Breuer, visited Indonesia from Nov. 1 to Nov. 14.

“Growth is projected at 5.1 percent in 2017 and 5.3 percent in 2018, led mainly by higher exports and investment. Domestic demand, which has been relatively subdued, is expected to rise modestly along with credit growth,” Breuer said in a statement issued on the last day of his visit yesterday.

He also recorded the mainly external risks, including a reversal in capital inflows, slower growth in China, and geopolitical tensions.

Meanwhile, domestic risks include tax revenue shortfalls and tighter global financial conditions that could push up domestic interest rates, Breuer said.

He said fiscal policy needed to be geared toward rebuilding fiscal buffers by targeting a lower budget deficit in 2018, while the monetary policy should continue to maintain price stability while supporting growth.

“The authorities should continue to allow the exchange rate to move freely in line with market forces,” he added.

The visiting IMF team also projected inflation to remain low at 3.7 percent in 2017 and 3.6 percent in 2018, due to broadly stable food and administered prices, while the current account deficit was expected to remain contained at 1.7 percent of GDP in 2017 and 1.9 percent in 2018. (bbn)

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