Indonesia

WHAT'S NEXT?: Indonesia's GDP is forecast to grow at 5% a year over 2016-2020, supported by strong growth in consumer demand and infrastructure investment. She is likely to be among the star economic performers for at least the next decade but at the same time faces great challenges to overcome past political and social issues.

• [New] Indonesia's economic growth this year will be driven by investment, as well as household consumption, considering the general elections of administration heads, which will be held across the nation this year.
• [New] Six of the seven largest economies in the world are projected to be emerging economies in 2050 led by China (1st), India (2nd) and Indonesia (4th).
• [New] Bangladesh, Indonesia, Nigeria, the Philippines, Vietnam, and the United States are all expected to increase rice consumption in 2018/19.
• [New] Bangladesh is expected to post the largest decline, with rice imports dropping 0.7 million tons to 1.1 million tons due to a substantial crop recovery: Indonesia's 2019 imports are projected to decline 0.6 million tons due to a slightly larger crop and adequate domestic supplies.
• [New] Due to factors such as the growth in air travel in countries such as China, India, Indonesia, Russia, and the US, the demand for air travel will significantly increase in the coming years.
• Indonesia, along with most other Southeast Asian countries, has an opportunity to capture a bigger share of global manufacturing activity.
• By 2050, China will have about 330 million citizens aged 65 or more, India will have about 230 million, and Brazil and Indonesia will each have over 50 million.
• Up to 90 percent of logging is expected in Indonesia and up to 80 percent in Brazil.
• Palm oil prices firmed up, buoyed by expectations the European Union will resume imports of palm oil-based biodiesel from Indonesia.
• Oil palms could suffer tree stress as haze returns to Southeast Asia this year.
• Indonesia, the world's fifth-biggest carbon emitter, has significantly scaled back its electricity output plans to boost the share of renewables, but will remain heavily reliant on coal.
• PME biodiesel supply is expected to remain constant due to domestic blending mandate requirements in Indonesia and Malaysia.
• Recent firmness in palm oil prices could hold back any plans to increase domestic blending mandate requirements in Malaysia and Indonesia.
• India and Indonesia were the last major central banks in Asia to cut rates last year and were mostly expected to stay put throughout 2018.
• Palm oil production in Indonesia will probably climb to a record this year as wet weather boosts yields in the world's top grower.
• Global palm oil production is set to reach a record in 2018 as the yield-sapping effects of the 2015-16 El Nino finally dissipate: Supply will increase between 5 million and 6 million tons this year
• Over the next five years, the CTTPP will expand to include Indonesia, Thailand, the Philippines, and perhaps one or two other ASEAN members.
• Malaysia is expected to produce some 21m tonnes of crude palm oil in 2017/18 (30% of global supply).
• GDP growth is also expected to increase gradually in Indonesia over 2018-19, helped by strong infrastructure investment and the improving regulatory environment.
• Excluding China, growth in developing EAP is expected to remain stable in 2018, reflecting solid prospects in Thailand and some commodity exporters, notably Indonesia.
• Growth in Indonesia and Thailand is expected to strengthen in 2018, with improved prospects for investment and private consumption.
• Robust growth is projected for the ASEAN-5 (Indonesia, Malaysia, Philippines, Thailand, Vietnam) economies, which are expected to grow at the rate of 5.3% during 2018, unchanged from the 2017 rate and are expected to improve slightly to 5.4% during 2019.
• Later this year Indonesia is expected to make a decision whether to procure Kilo class submarines.

Last updated: 21 May 2018