OECD: Strong Growth in Indonesia but Takes Time to be High-Income Economy
The latest report of the Organisation for Economic Co-operation and Development (OECD), titled "Structural Policy Challenges in Indonesia", mentions that Indonesia - with an annual GDP growth projection of about 6 percent - is estimated to be the country with the highest level of economic growth among the ASEAN countries between 2014 and 2018. The report is positive about the region's economic future that lies ahead, particularly China, despite the global crisis having managed to slow down economic expansion.
OECD Growth Projections 2014-2018:
| GDP Growth | |
| Indonesia | 6.0% |
| Philippines | 5.8% |
| Malaysia |
5.1% |
| Thailand |
4.9% |
| Singapore | 3.3% |
| Brunei Darussalam |
2.3% |
Source: OECD
Southeast Asia, together with China and India, will grow due to increased domestic demand although India is expected to start to weaken. OECD Development Centre economist Kensuke Tanaka said that it is important for Asian developing countries to implement structural reforms in order to maximize usage of capital inflows and anticipate the negative impact of capital outflows.
The OECD expects that Indonesia will become a high-income economy in 2042, significantly later than its regional peers Thailand (2031) and Malaysia (2020). A high-income economy is defined as a country with a gross national income per capita above USD $12,000 (in 2013). Based on a simulation that takes into account economic growth, inflation and the exchange rate, the OECD came to this conclusion in the report "Beyond Middle Income Trap"
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