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View all search resultsIndonesia still ‘bright spot’ in troubled world economy: IMF
The International Monetary Fund has praised Indonesia for maintaining economic growth and containing inflation amid mounting pressure from external factors but emphasizes that the country needs the right “policy mix” to secure the future.
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The seal of the International Monetary Fund (IMF) is seen on the financial institution's headquarters building in Washington, DC, on April 7, 2021. (AFP/Mandel Ngan)
T
he International Monetary Fund has praised Indonesia for maintaining economic growth and containing inflation amid mounting pressure from external factors but emphasizes that the country needs the right “policy mix” to secure the future.
Following its 2025 Article IV consultations on Indonesia, the IMF wrote in a press release on Saturday that “Indonesia remains a global bright spot, with strong economic growth amid a challenging external environment, and inflation expected to remain comfortably in the target range”.
“The Indonesian economy has shown resilience amid adverse shocks”, IMF mission chief for Indonesia Maria Gonzalez said in the statement, adding that the archipelago’s gross domestic product was projected to grow by 5 percent in 2025 and 5.1 percent next year.
As key external risks to that projection, Gonzalez named trade tensions, prolonged uncertainty and global financial market volatility.
“On the domestic side, large policy shifts, if not implemented with sufficiently robust guardrails, could build up vulnerabilities. Upside risks include bolder structural reforms, including faster-than-anticipated push on the trade front, and positive spillovers from stronger growth among trading partners,” said Gonzalez.
Her team’s analysis projected the fiscal deficit this year to close at 2.8 percent of GDP, in line with the government’s latest projection of 2.78 percent made in the middle of the year, and below the legal cap set at 3 percent of GDP.
The deficit was sitting at 1.56 percent of GDP at the end of the third quarter, and Finance Minister Purbaya Yudhi Sadewa revealed on Friday that some state institutions had “given up” on expending the full budgets allocated to them for the year, instead opting to return funds.
