SURABAYA, E. Java: The International Monetary Fund (IMF) has predicted that the Indonesian economy will grow at a rate of 5.1 percent in 2017, mostly fueled by high consumption and private investment.
“The growth will follow a recovery in the commodity prices and lower lending rate in 2017,” IMF Executive Council Luis E. Breuer said in a press statement released on Friday.
The IMF also predicted that the Indonesian economy will expand by 5.0 percent this year, fueled by high private consumption.
Indonesian inflation rate in 2016 is projected to reach 3.3 percent year on year and increase to the mid-range of 3-5 percent in 2017 due to the adjusted target of electricity subsidy, he added.
“The current account deficit is projected to increase from 2 percent of the gross domestic product (GDP) in 2016 to 2.3 percent next year due to an increase in fixed investment and imports,” Breuer stated.
The IMF praised the good economic conditions in Indonesia as of November-end 2016, fueled by a mixture of proper and prudent policy in the macro economy and structural economic reforms.
“The authority (in Indonesia) is capable of directing its economy to steer it through the various dynamics in the global economy,” he underlined.
The IMF supports the governments steps to improve fiscal structure by slashing budget proportionally as per state revenues.
The way in which the government has expanded state revenue sources to spur economic growth has helped induce a sense of stability as it managed to prevent the deficit from exceeding 3 percent of the GDP, the IMF noted.