Indonesia: Solid growth underpinned by better fundamentals

​Gradual acceleration

After reaching a low point in 2015 (+4.9% GDP growth), the economy bounced back supported by strong domestic demand growth.  Looking ahead, EH expects +5.1% growth in 2017 and +5.2% in 2018. 

The outlook for exports is improved by higher demand from major economies, and a gradual recovery of commodity prices. Macro-policies are becoming more supportive as key structural imbalances, namely a large current account deficit and a high level of inflation, have been reduced. 

Improved business sentiment, favourable credit conditions and rising new exports orders suggest a gradual rise in investment. Private consumption growth is set to remain firm. It is supported by a dynamic labor market and a combination of high wages growth and moderate inflation