Indonesia: Jokowi Says His Reforms Are a Success With Growth Above 5%

  • Conditions are much better now than when he took office three years ago, with economic growth back at above 5% and the currency rebounding, Widodo, known as Jokowi, said in his speech at Bloomberg’s Year Ahead Asia Conference in Jakarta on 6 Dec 17.
  • The economy grew more than 5% every quarter in 2017 and is forecast by the government to expand 5.4% in 2018. While that’s still below the 7% target set by Jokowi when he came to power three years ago, a recovery in exports and rising investment are underscoring the strength in Indonesia’s economy, he said.
  • Jokowi has been rewarded for his economic reforms with an investment-grade credit rating from S&P Global Ratings in 2017 and a flood of foreign investment in the nation’s bonds. After dropping to its weakest level since 1998 in Sep 15, the rupiah has gained nearly 9% against the dollar.
  • The government has worked hard on reforms, including removing fuel subsidies to free up funds to finance building roads, railways and ports, the president said.
  • “We are on track to complete the most amount of infrastructure ever built during a five-year period in Indonesia,” he said.
  • Jokowi, who is yet to commit to running for re-election in 2019, still faces plenty of economic challenges. Indonesia has a poor record of tax compliance and he needs to raise revenue to help keep the budget deficit under control.
  • While Indonesia has jumped 19 places to be ranked 72 out of 190 countries in the World Bank’s latest ease of doing business index, the nation still needs to reduce regulatory uncertainty to spur foreign investment.

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