World Bank lifts Indonesia 2016 economic prospect to 5.3% from 4.7%

The World Bank (WB) has lifted its Indonesian economic prospect forecast for 2016 to 5.3 per cent from 4.7 per cent, reports Vietnam News Agency (VNA).

The WB's head economist in Indonesia, Diop said the government's spending will go up to 3.2 per cent, an increase of 1.1 per cent compared to 2015, while export is expected to rise 4.7 per cent thanks to the recovery of the Chinese economy the main trade partner of Indonesia.

The Asia Development Bank (ADB) has also projected the Indonesian economy to grow to 5.3 per cent in 2016.

According to Governor of Indonesia's central bank (BI) Augus Martowardojo, the country's economy will have to face many challenges in 2016, including China's economic recession, downward trend of global good prices, instability in the US Federal Reserve (FED) policies, and evaporating foreign investment.

However, Agus said Indonesia will still enjoy a high economic growth thanks to aiding packages for investment and industrial sector as well as regulations in macro-economic management.

The Indonesian Businessmen Association (Apindo) said the country's economic growth speed in 2015 hit the slowest in the past five years due to ineffective operation of infrastructural projects.

Since September 2015, the Indonesian government has issued at least seven economic policy packages to consolidate the domestic economy in the context of the global economic recession, such as removing several regulations in investment, reducing administrative procedures, and providing tariff preferences.

International organisations, economists believe that economic policy packages introduced in 2015 will help boost Indonesia's economy in 2016.