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Jakarta Post

Infrastructure spending to help maintain Indonesia's economic growth

  • Winny Tang

    The Jakarta Post

Nadi, Fiji   /   Fri, May 3, 2019   /  03:11 pm
The Jakarta Post Image
Participants gather in Nadi, Fiji, from May 1 to 5 for the 52nd Annual Meeting of the Asian Development Bank’s (ADB) Board of Governors.(Courtesy of Asian Development Bank/-)

Tightening global financial conditions have affected Asia, particularly Indonesia and the Philippines, which saw their borrowing costs rise abruptly, according to a flagship report released by the ASEAN+3 Macroeconomic Research Office (AMRO) in Fiji on Wednesday. Capital outflows from those regions totaled US$6 billion in September and October as foreign investors liquidated portfolios, according to the report. Just like other emerging markets, Indonesia has been confronted with external pressure. As a result, Bank Indonesia has tightened monetary policy to ensure financial stability, by raising its key policy rate six times from May-November 2018 by a cumulative 175 basis points. AMRO expects Indonesia’s real GDP growth to be 5.1 percent in 2019 and 2020, similar to the 5.17 percent rate achieved in 2018.  Hoe Ee Khor, chief economist with AMRO, said at this point...