Indonesia Can Weather the Storm

The International Monetary Fund said the Indonesian economy will remain stable in the medium term, and expects the country to be able to weather easily increasing uncertainties in the global economy thanks to prudent fiscal and monetary policies and an effective reform in its bureaucracy.

The Indonesian government has so far managed to maintain strong economic growth, low inflation and healthy current account deficit, according to an end-of-mission statement from the IMF released on Thursday, NewsNow reported.

These would serve Southeast Asia’s biggest economy well, especially against risks from policy uncertainties in the United States under the new administration of Donald Trump next year, tight financial conditions globally, slower-than-expected growth in China and a renewed fall in commodity prices.

“The authorities have skillfully navigated the changing currents in international economy,” Luis E. Breuer, IMF Article IV Mission to Indonesia’s team leader, said in a statement.

The latest report from Indonesia’s statistics agency said its economy expanded 5.02% in the third quarter this year, a dip from 5.19% in the previous quarter. The government and the central bank expect a 5% full-year growth in 2016 and 5.1% next year.

Inflation stood at 3.31% in October with an average of 3.58% in January-October, lower than the 4% target in the 2016 revised state budget.

Indonesia’s current account deficit reached $4.5 billion in the third quarter—about 1.8% of its GDP—lower than the $5 billion in the previous quarter, reducing the country’s dependency on financing from abroad.