Indonesia is on a modest growth path in 2017 and 2018

Subject

Indonesia’s economic outlook.

Significance

Three years into his presidency, President Joko ‘Jokowi’ Widodo has yet to achieve his campaign promise of boosting annual GDP growth to 7%. In the two years remaining before his term ends in 2019, weaker global growth and lower commodity prices will make this growth target impossible to achieve.

Impacts

• A sharp rise in investment is unlikely in 2017 and 2018 due to regulatory uncertainties.
• Regulations in sectors such as oil and gas, and mining, will be altered in line with economic needs and political compulsions.
• Indonesian exporters face a risk of increased US protectionism in sectors such as biodiesel.