Indonesia Economy Articles & Analysis

Chapter | Table of Contents from The Report: Indonesia 2018

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With investment in industrial zones, SEZs, infrastructure and priority industries set to increase in the coming years, Indonesia remains extremely well positioned to capitalise on its position as a regional leader.

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What is your overall assessment of Indonesia’s economic progress and performance in 2018?

After achieving a foreign trade surplus last year on the back of strong demand for minerals and agricultural products, Indonesia is looking to sustain growth by building ties with new markets, as well as deepening relationships with existing partners.

 

After long-term struggles to meet tax collection targets, the government rolled out a bold tax amnesty initiative in 2016. The programme – eliminating criminal prosecution and large back tax bills, and offering lower tax rates on hidden assets – has been successful, as trillions of rupiahs of onshore and offshore assets and income have been...

 

What measures and policies can further support Indonesian GDP growth in the coming years?

 

Authorities have considerably reduced the current account deficit, which fell to historic lows in 2016. Improved fiscal management led to global ratings agency Standard & Poor’s upgrading Indonesia’s sovereign credit rating in May 2017, which should encourage greater capital inflows. Meanwhile, a gradual rise in commodities prices will...

 

Commodities exports are an important part of the Indonesian economy, and the country has been negatively affected by a slump in global prices, with export receipts contracting significantly since 2012. Although much of this is due to weakening demand in China, Europe and the US, the recent introduction of several protectionist policies –...