The International Monetary Fund (IMF) has released the results of the assessment report on the Indonesian economy on Thursday (1/8/2019). Overall, in the evaluation contained in this report titled Article IV Consultation in 2019, IMF assessed Indonesia’s economic performance as positive. Even though it was in the midst of external pressure, especially the capital outflow was quite large. Economic growth is around 5 percent according to the IMF Executive Board. This was supported by strong domestic demand which was able to cover the decline in net exports.
The increase in the price of food successfully suppressed turned out to also succeed in making the inflation rate and core inflation quite low at around 3 percent. Not only are food prices, electricity prices and a number of fuels maintained, and supported by strict macroeconomic policies. However, the current account deficit (CAD) widened in 2018 to 2.98 percent of gross domestic product (GDP), compared to 1.6 percent in 2017. The widening of the CAD was due to falling commodity exports and rising imports related to infrastructure development.
IMF stated a positive outlook for the Indonesian economy with economic growth projected at 5.2 percent for 2019 and 2020. In the medium term, economic growth has the potential to continue to increase to 5.3 percent, still supported by domestic demand.
Previously, the IMF had predicted global economic growth for this year and 2020. They predict, this year’s economic growth will be 3.2 percent lower than last April’s prediction of 3.3 percent. While next year it is predicted that economic growth will increase 3.5 percent, lower than the previous estimate of 3.6 percent.