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Jakarta Post

RI risks falling into middle-income trap

  • Raras Cahyafitri

    The Jakarta Post

Jakarta   /   Sat, October 13 2012   /  10:33 am

Indonesia risks falling into a so-called middle-income trap if it fails to improve infrastructure needed to sustain faster economic growth, says the International Monetary Fund (IMF).

“This [middle-income trap] is going to happen sometime from now. It is essential to focus on how to sustainably release capital and infrastructure spending in Indonesia,” IMF Asia and Pacific department director Anoop Singh said on Friday.

Singh said like most emerging economies, Indonesia would have to sustain its economic growth in the medium term or be exposed to a situation in which the economy remained at a middle level of income.

Emerging Asian economies, according to the IMF, are estimated to grow by 6.1 percent this year and 6.8 next year, well above the global outlook of only 3.3 percent this year and 3.6 percent next year. Meanwhile, Indonesia is projected to grow by 6 pe...