Jakarta – Indonesia's gross domestic product (GDP) grew 5.1 percent in the first quarter, consistently within a narrow range of 4.9-5.3 percent for the last 14 quarters, according to the World Bank's June 2019 Indonesia Economic Quarterly released on Monday.
"Despite capital outflows from emerging markets in 2018 that were larger than during the 'taper tantrum' in 2013, Indonesia's economy remains strong, which helped reduce poverty to a record low of 9.7 percent in September 2018," said Rodrigo A. Chaves, World Bank country director for Indonesia and Timor-Leste in a press statement.
"To accelerate growth from current levels, Indonesia needs further and sustained structural reforms, while maintaining solid fiscal and monetary policies."
Growth in fixed investment decelerated from multiyear highs, while both private and government spending picked up, the bank says, adding that this helped moderate the pressure on the current account deficit, which was large in 2018 in part because of imports used in infrastructure and private investments.
Indonesia's economy is projected to grow at 5.1 percent in 2019 and then rise to 5.2 percent in 2020. This projection is supported by private spending, which is expected to continue to accelerate as inflation remains low and labor markets strong.
Risks to Indonesia's growth projection have increased with the recent reescalation of global tensions that could further weigh on world trade, according to the press statement.
This edition of the quarterly also looks at the importance of the maritime economy to Indonesia's economic development and sustainable growth.
"The government of Indonesia has shown a strong commitment to making the country a global maritime powerhouse," said Ann Jeannette Glauber, World Bank practice manager for environment and natural resources. (bbn)