ECONOMY | Staff Reporter, Indonesia

Indonesia's GDP to grow 5.3% in 2018

This will be the highest GDP growth in Asia.

BMI Research reported that Indonesia’s GDP will grow by 5.3% in 2018, from a forecast of 5.1% in 2017.

“We believe that growth in Southeast Asia's largest economy will be supported by the Jokowi government's continued reforms, Bank Indonesia (BI)'s easy monetary policy, and plans to boost infrastructure investment,” BMI Research said.

Here’s more from BMI Research:

In terms of improving the still-challenging business environment, the government continues to undertake structural reforms, with policymakers announcing plans in November to form 'ease of doing business' task forces in both the central and regional governments with the aim to smoothen the licensing process.

Additionally, the central bank has already reduced interest rates by a cumulative 200bps since the start of 2016, with the benchmark 7-day Reverse Repo Rate standing at 4.25%, and loose monetary policy should gradually lead to a pick-up in credit growth.

Lastly, Indonesia faces an infrastructure deficit, with investment in 2017 including the construction of 794 kilometers of (toll) roads, 9,072 meters of bridges, and 11 airports across the nation, according to policymakers. Infrastructure investment in this area remains a top priority for the government in 2018.

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