Cover of The Report: Indonesia 2017

The Report: Indonesia 2017

The Indonesian government is in the midst of pursuing an ambitious new growth strategy, emphasizing investment over domestic consumption as a primary growth driver in the wake of depressed commodity prices, lagging household consumption and lower-than-anticipated government revenues.

Although Chinese and global demand, low commodity prices and rising wages will continue to challenge trade growth in 2016, Indonesia remains on a positive trajectory. Rising domestic demand, increasing liberalisation measures, improvements to the investment climate and a shift towards value-added production will bolster both exports and investment. At the same time, new trade agreements with the world’s largest economies look set to drive long-term trade expansion. Prudent government policy, an ambitious reform agenda and rising recognition of the role of the private sector should help to keep investment and trade stable in 2016, and though exports and growth have dipped in recent years, the country is well positioned to make the crucial transformation from a consumption- to investment-based economy.

OBG & Indonesia