CURRENT ECONOMIC PERFORMANCE
2016 EPI score
Indonesia: strong growth
The Indonesian economy is growing at a strong pace with prudent fiscal and monetary policies, but elevated inflation puts pressures on the overall economic performance. The EPI grades Indonesia’s current economic performance at a B level, with the EPI score projected to be close to 91.8% in 2016.
GDP growth is projected to reach 5.1% in 2016, mainly driven by private consumption. Inflation remains close to 5.4%, despite disinflationary effects of lower commodity prices. Import-substitution policies, such as the imposition of higher tariffs across a range of consumer goods, as well as the currency weakness have also created inflationary pressures in 2015-2016. The budget deficit is projected to stay close to 2% of GDP, despite the government’s expansionary policies. Unemployment has been on a declining path and is projected to be below 6% in 2016.
The 5-Minute Economist projects Indonesia’s EPI score to increase gradually in the medium term from almost 92% currently to about 95%, or a B+ level, by 2020. Economic growth is likely to accelerate, with the main contribution to economic growth coming from private consumption, supported by the rising number of formal-sector jobs, the expansion of the social-welfare net, and some loosening in monetary policy. Inflation is likely to slow down slightly, but budget deficit and unemployment levels are likely to stay close to their current levels.
ECONOMIC PERFORMANCE HISTORY
EPI COMPONENTS PERFORMANCE HISTORY
EPI DATA FOR INDONESIA
|Year||Inflation Rate (%)||Unemployment Rate (%)||Budget Deficit as a Percent of GDP (%)||Change in Real GDP (%)||Raw EPI Score (%)||Change From Previous Year||Raw EPI performance|