World Bank Report: Indonesian economy state of affairs in 2019

guest article

guest article

In 2018, Indonesia’s coordinated and prudent macroeconomic policy framework underpinned steady economic growth, amid global volatility and several natural disasters. Real GDP growth strengthened to 5.2 percent yoy in 2018 from 5.1 percent in 2017.

Indonesia’s ocean ecosystems have tremendous economic potential that has yet to be fully harnessed. Its fisheries sector is the second largest in the world and plays a critical role providing food security and employment. Indonesia’s tourism sector benefits heavily from the country’s world-class marine and coastal (MAC) assets, with MAC tourism being a key driver of visitor growth.


  • Indonesia’s GDP growth was broadly stable at 5.1% in the first quarter of 2019. The country has maintained a stable economic growth, which consistently remained within a narrow range of 4.9-5.3% for the last 14 quarters.
  • Drivers of the country’s economic growth shifted over the first quarter of 2019. Growth in fixed investment decelerated from multi-year highs, while both private and government consumption picked up.
  • The current account deficit moderated in early 2019 as imports shrank faster than exports as investment growth decelerated.
 Indonesian economy state of affairs in 2019 | Inflation rate
Indonesian economy state of affairs in 2019 | emerging markets growth


  • Indonesia’s macro-financial conditions have improved since November 2018. Capital flows made a solid recovery from the global financial volatility of mid-2018 that saw larger capital outflows from emerging markets than during the taper tantrum of 2013.
  • With a relatively stable exchange rate, subdued oil prices, and stable domestic energy prices, inflation fell to an average of 2.6% in the first quarter of 2019, the lowest since the fourth quarter of 2009.
  • Indonesia’s GDP growth is projected at 5.1% in 2019 then recover to 5.2% in 2020. The modest acceleration in private consumption is expected to continue as inflation remains low and labor markets strong. The fiscal position is expected to improve, allowing government investment to strengthen as infrastructure projects recommence and post-disaster reconstruction begins.
 Indonesian economy state of affairs in 2019 | Inflation rate
Indonesian economy state of affairs in 2019 | GDP & unemployment 


  • Risks to Indonesia’s growth outlook have increased with re-escalating global trade tensions which will likely further weigh on world trade. In addition, slower global growth among developed economies and China also poses substantial risks.
  • This edition also highlights the importance of the maritime economy to Indonesia’s economic development and presents the challenges and opportunities the country faces in leveraging the maritime economy for greater prosperity. Realizing the full potential of these sectors will require:
    • reforms that improve natural resource management, conserve ecosystems, improve seafood quality, enhance the tourist experience, and create opportunities to more strongly brand Indonesia’s marine and coastal assets.
    • investments to protect marine and coastal assets from marine debris.
 Indonesian economy state of affairs in 2019 | Inflation rate
Indonesian economy state of affairs in 2019 | Inflation rate




Article source:

Share this post