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Indonesia Economic Snapshot

Economic Forecast Summary (May 2021)

GDP growth is projected to resume at around 5% annually in 2021 and 2022. The economy has been slowly recovering since mid-2020 thanks to policy support, gradual reopening and favourable global conditions. The second wave of the virus and the slow pace of inoculation are preventing a faster normalisation of activity. Lingering concerns about the pandemic weigh on consumer and business confidence and prevent domestic demand to return to trend levels. External demand for commodities such as coal, palm oil and rubber supports growth, with positive prospects thanks to the signing of RCEP (Regional Comprehensive Economic Partnership) and other trade agreements.

 

Reform Priorities (April 2021)

Going for Growth 2021 - Indonesia

The COVID-19 crisis has brought to the fore the vulnerability of the population to economic shocks, notably due to extensive informality, lagging skills and low social security coverage. Reforms in areas of skills, labour market regulation and barriers to entrepreneurship are hence top priority for a more resilient and equitable growth.

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2021 Structural Reform Priorities

  • Education and skills: Improve outcomes in education
  • Labour market: Reform labour regulations to reduce informality
  • Competition and regulation: Ease barriers to entrepreneurship and investment, and strengthen institutions to fight corruption
  • Infrastructure: Improve the regulatory environment for infrastructure
  • Energy: Continue to make energy prices more cost-reflective

 

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Economic Survey of Indonesia - 18 March 2021

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