The success is closely related to the successful management of economy and precise reformation timing, especially in the subsidy for fuel.Victoria Tunggono 23 March 2016 12:57
Brilio.net - The International Monetary Fund (IMF) recently said that Indonesia is the developing country with best performance in 2015. The success is closely related to the successful management of economy and precise reformation timing, especially in the subsidy for fuel.
Lensaberita reported that the IMF assessment result toward Indonesia was written in the assessment report Article IV Consultation and published at the IMF website on March 15, 2016. This shows a significant progress in the policy framework in the past few years and the improvement in macro-economic resilience that successfully strengthened the macro-economic stability and supported growth.
This made Indonesia “safely navigate a difficult external environment in 2015, characterized by the fall of commodity prices, shifts in global financial conditions, and slower growth of trading partners,” according to the head of IMF Mission for Indonesia, Luis E. Breuer.
“Over the past few years, the significant strengthening of the policy framework in Indonesia has bolstered macroeconomic resilience. This was demonstrated by sound monetary management and a prudent fiscal stance, underpinned by historic fuel subsidy reforms in 2015,” said Breuer.
Breuer wrote on the website, “These actions reinforced macroeconomic stability and supported growth. In effect, Indonesia safely navigated a difficult external environment in 2015, characterized by the fall of commodity prices, shifts in global financial conditions, and slower growth of trading partners. Medium-term prospects are favorable, supported by an inclusive growth-enhancing policy agenda that also places emphasis on stability.”
“Overall, macroeconomic performance in 2015 has been positive. Economic growth is forecast to see a moderate acceleration to around 5 percent in 2016; investment activity would lead the recovery, in particular, public sector spending. However, weak commodity prices and slower demand from trading partners present headwinds to growth.”
“Inflation has fallen sharply at end-2015, and is expected to remain within the inflation target band (3–5 percent) in 2016. The external current account deficit narrowed significantly in 2015 to around 2 percent of GDP on lower imports, and is projected to increase moderately in 2016 due to a pickup in domestic demand. The fiscal deficit in 2015 widened but remained below the 3 percent of GDP statutory limit for the general government.”
Even so, to maintain the strong growth and development, IMF is reminding the Indonesian government to keep pushing and expanding the ongoing reformation. This is important to improve the infrastructure investment, to strengthen business environment and to open trading.
As a reference, Article IV Consultation is part of the annual surveillance activity by IMF to its countries members. The assessments are a comprehensive analysis of the monetary, fiscal, exchange rate, vulnerabilities risks policies that arise from the volatility of capital flows as well as the institutional and structural issues in Indonesia. The Article IV Consultation 2015 was done on December 3-17, 2015 and led by Luis E. Breuer.