A report released by the Asian Development Bank on Tuesday, September 22, 2015, stated that the Indonesian economy is expected to grow in 2016. The report stated that rising public investment and continued economic reforms will drive the Indonesian economy upward in 2016.
In the report titled “Asian Development Outlook 2015“, ADB forecasted that Indonesia’s gross domestic product (GDP) in 2016 will grow by 5.4 percent, lower from the six percent figure forecasted earlier in March, but higher than the 4.9 percent growth expected this year. In March, ADB forecasts a 5.5 percent growth in 2015.
“Delay in economic recovery is primarily due to weak-than-anticipated external demand and financial market volatility,” said Steven Tabor, ADB Country Director for Indonesia. Tabor added that measures on deregulation, stronger infrastructure investment, and export recovery triggered in part by the Rupiah devaluation are likely to spur economic expansion in the coming year.
Meanwhile, increased public spending that was previously hampered by slow budget disbursement, is expected to be a key driver in economic growth. The government has taken measures to improve budget execution, which include efforts to simplify land acquisition procedures, and advancing the tendering process for procurement of most public projects under the 2016 budget to expedite implementation.
In the private sector, policy reform including a new one-stop service for investment licensing and encouraging private investment in selected infrastructure projects through public-private partnership is expected to stimulate more investment.
TEMPO
