Indonesia Country profile

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Robust exports and solid investment caused the Indonesian economy to grow 5.2% in 2017, up slightly from the 5% witnessed in 2016. Stronger global demand and ongoing recovery in global metals and energy prices will bode well for exports. Higher public infrastructure investment and more friendly business conditions will support the 2018 outlook. But banking sector weakness is weighing on credit growth, while less accommodative monetary policy in advanced economies and ensuing financial market volatility add risks to the outlook.

The medium term outlook is positive. Favourable demographics and an expanding middle class bode well for Indonesia. But much rests on the Jokowi administration’s ability to execute its reform agenda over the medium term. The infrastructure gap is of particular concern, with logistic expenses equivalent to 24% of GDP, compared to 13% in Malaysia.  

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Per capita income has risen from around US$870 in 2000 to over US$3,800 in 2017. But Indonesia is still well below the regional average — current per capita income ranks it only 116th in the world.

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