Indonesia Economic Outlook 2018

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 177% from 2014, GDP growth in 2017 still has not picked up pace. Job creations that are touted as positive effect of infrastructure spending and construction have also yet to materialize. This issue will be discussed in detail in our dedicated section below (see “I nfrastructure-Growth Paradox” in p. 10).

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