Coordinating Economic Minister Darmin Nasution credited household spending for the strong growth, as well as investments, amid sluggish exports that grew slower than imports.

“The growth of [household] spending as well as investments in our economy were quite good amid the slowdown in export [growth],” said Darmin in Jakarta on Wednesday.

Exports of goods and services grew by 6.48 percent in 2018, while imports of goods and services increased by 12.04 percent over the same period.

Darmin said the government would continue its efforts to boost exports to reach the target of 5.3 percent GDP expansion as outlined in the 2019 state budget.

“We will focus on [reforming] export and logistics procedures,” said Darmin. “The point is that we will provide support to help exports recover while at the same time we will also deal with industry.”

Indonesia’s industrial structure lacks the midstream businesses that connect upstream and downstream players, a situation that economists call the “hollow middle”, indicated by a country’s large imports of capital goods, raw materials and intermediary goods.

The government issued last year a revamped tax holiday scheme to incentivize new investments made in “pioneering” sectors as one of various efforts to address the issue. (bbn)

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