IMF Staff Completes 2016 Article IV Mission to Indonesia

An International Monetary Fund (IMF) team, led by Luis E. Breuer, visited Indonesia from November 7–18, 2016, to conduct the annual Article IV Consultation. The team exchanged views with officials in the government, Bank Indonesia, and other public agencies, as well as representatives of the private sector, academics, and students on recent economic and financial market developments and the near-to-medium-term outlook.
At the conclusion of the visit, Mr. Breuer issued the following statement:
“The Indonesian economy continues to perform well, supported by a prudent mix of macroeconomic policies and structural reforms. Growth remains strong, inflation has dropped significantly, and the current account deficit has been contained. These achievements underpin a favorable economic outlook.
“Growth in 2016 is projected at 5 percent on account of strong private consumption. In 2017, growth is expected to reach 5.1 percent, driven by private consumption and a gradual pickup in private investment in response to a recovery of commodity prices and lower interest rates. Inflation is projected to rise from around 3.3 percent at end-2016 to just above the middle of the official target band at end-2017 due largely to better targeting of electricity subsidies.
“Downside risks to the outlook are largely external, stemming from uncertainties about policies of the next United States administration, tighter global financial conditions, slower-than-expected growth in China, a faster pace of monetary tightening in the United States, and a renewed fall in commodity prices. Domestic risks include a smaller fiscal buffer, reflecting tax revenue shortfalls or higher domestic interest rates due to tighter global financial conditions.
“The IMF’s Executive Board is tentatively scheduled to discuss the staff report in January 2017.”
Press-release at the official IMF web-site