Indonesia Growth to Pick Up to 5.3%

Driven by higher social spending, easier monetary policy and stronger private investment, Indonesian growth is expected to pick up to 5.3% in 2018, the Qatar National Bank has said in an economic commentary, The Peninsula reported. Growth in Indonesia has been remarkably steady for the last four years, barely diverging from the 5% level and coming in at 5.1% in 2017. However, in 2018, QNB expects growth to break away slightly from this flat-lining and pick up to 5.3%, thanks to three positive drivers—higher social spending, easier monetary policy and stronger private investment. First, consumption will likely be helped by an increase in social spending ahead of elections in 2019. A shift in focus from infrastructure to higher social spending was planned in the latest budget for 2018. This included a budgeted increase in social transfers of 0.5% of GDP on cash and food benefits to lower income households. Second, easier monetary policy should lend support to growth. Finally, private investment should be supported by recent government measures.