Indonesia Targets 5% GDP Growth

Published on: 13 Jul, 2017

Indonesia is targeting a comeback for its economy. Having  been weighed down by a decrease in spending and lack of investments in early 2017, the Parliamentary Budget committee has agreed the government's request to raise the target growth from 5.1% to 5.2%.

In its effort to resume the growth the country had seen  prior to the crash in 1997, and even as recently as 2013-2014, the committee approved several new changes of their macroeconomic assumptions, including a weaker rupiah exchange rate, slightly higher inflation and a slight bump in crude oil prices that the  country can command.

The government has also lobbied for the committee to lower  revenue targets, but further deliberations must go on before the plan as a whole is accepted by the Parliamentary body. The country has been recovering as a whole but fell into a slow decline from 2010 to 2015, shrinking from over 6% growth to just under 5%  in those years, but 2016’s rate of 5.016% after 2015’s 4.876% offers some hope.

Should Indonesia reach the 5.2% market set on itself it will signify a comeback for the small nation which heavily relies on exportation of natural gas and oil. But with the global  push towards renewable energies such as solar and wind, unless the economy undergoes a change in tact within the next 10 years, its growth rates might find themselves well below the 5% mark.  

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Nikita Medvedev

Email: Nikita@financialinsiders.com

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