In the second half of September 2018 the World Bank released its latest Indonesia Economic Quarterly (abbreviated IEQ), titled “Urbanization for All”. The IEQ, a flagship publication of the Washington-based institution which (at least in our view) is among the most interesting reports that are on a regular basis published about the Indonesian economy, has two main aims. Firstly, it informs about the key developments that occurred in Indonesia’s economy over the past three months, and places these developments in a longer-term and global context. Secondly, the IEQ provides an in-depth examination of selected economic and policy issues and an analysis of Indonesia’s medium-term development challenges.
In the September edition, the World Bank remains optimistic about the Indonesian economy despite the high degree of uncertainties in global financial markets. Real gross domestic product (GDP) grew 5.3 percent year-on-year (y/y) in the second quarter of 2018 from the same quarter one year earlier, as domestic demand strengthened. This is the fastest pace in more than four years.
Private and government consumption accelerated thanks to higher subsidy and personnel spending, while a pick-up was detected in credit growth, higher agricultural incomes, as well as stable inflation.
However, downside risks to economic growth have increased amid possible contagion effects from volatility associated with Argentina and Turkey, and stronger economic conditions and inflation in the USA, while escalating protectionism also poses strong risks. Indonesia’s economic growth is forecast to reach 5.2 percent (y/y) in both 2018 and 2019, and gradually strengthen to 5.3 percent (y/y) in 2020.
Read the full article in the September 2018 edition of our monthly research report. You can purchase this report by sending an email to email@example.com or a WhatsApp message to the following number: +6287884106944
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