Economic Outlook

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Higher commodity prices and infrastructure spending have not been followed by increase in household consumption. This condition is also exacerbated by low growth of outstanding investment loans. The need to ensure macro stability by managing budget deficit means government should adjust its infrastructure spending plan to a more realistic target. Fiscal stimulus should not be...
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Relatively disappointing performance in Q3 and very possibly Q4 means that economic growth is still on a relatively shaky ground going forward in Q1 2018. Rising commodity prices and infrastructure boost have not been translated into higher consumption (Page 8). This condition is not helped by low loan growth for investment purposes, a sign of...
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In its pursuit of higher growth and inclusive prosperity, Jokowi administration put infrastructure constructions as its flagship agenda and allocate massive budget for infrastructure development. While in theory infrastructure investments should accelerate growth, there is growing disconnect between infrastructure push by government and economic growth; even as budget allocation for infrastructure in 2017 increased by...
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Indonesian GDP has been around its stable growth path which is more or less 5% per year in the last four years. Construction sector has been growing strongly since 2014. The ever-increasing investment in infrastructure projects would push this sector even higher. Information and Communication sector has dominated all of the sectors in GDP. The...
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2017 presents both good news and bad news for Indonesia, which we expect to be evident in Q1 2017 economic data. On one hand, Indonesia has successfully weathered structural adjustment for the last 5 years and is now in relatively healthier posture.  Investment  climate has  improved considerably due to the success of tax amnesty programs,...
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Still consistent with our previous outlook, we expect 2016 GDP to grow at around 5.1% level, higher than the preceding year. This is attributable to more robust consumption growth amid low inflation. However, this growth is most probably lower than the potential amid stagnating government spending in 2016 due to two budget cuts in the second semester...
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The overall sentiment in Q3 and going forward is leaning toward cautious optimism across the board. While external environment remains challenging for Indonesian economy as a whole, most of the headwinds in global macroeconomic outlook have been already taken into account.
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