AMRO’s 2018 Annual Consultation Report on Indonesia

2018-10-09T14:31:05+00:00October 9, 2018|Annual Consultation Reports|

AMRO’s 2018 Annual Consultation Report on Indonesia

The Indonesian economy has been resilient against external headwinds, with growth projected to pick up to 5.2 percent and inflation contained within the target band in 2018. The external position has been under pressure amid capital outflows that reflected investors’ risk aversion towards emerging markets. In response to rising external risks, recent policy mix recalibration with the implementation of “pre-emptive, front-loading, and ahead-of-the-curve” measures has focused on maintaining stability while supporting growth. Downside risks remain external, emanating from investors’ ongoing rebalancing of their emerging market portfolio alongside monetary policy normalization among developed markets and rising global trade tensions. Hence, continued pro-active policy mix recalibration to safeguard stability while supporting growth is recommended. Ongoing efforts to deepen the domestic financial markets and broaden the domestic investor base and strengthen financial literacy and inclusion are recommended.

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