Indonesia: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Indonesia

International Monetary Fund

No 2023/221, IMF Staff Country Reports from International Monetary Fund

Abstract: The 2023 Article IV Consultation highlights that Indonesia’s forward-looking and well-coordinated policies helped it close out the highly challenging global environment of 2022 with healthy growth, falling inflation, and a stable and profitable financial system. Growth is projected to moderate slightly in 2023 amid tighter domestic policy settings and the normalization of commodity prices, while inflationary pressures are expected to subside, with inflation falling within BI’s headline inflation target band in the second half of 2023. Risks are balanced, but a highly uncertain global economic environment continues to cloud the outlook. Continued high inflation and growth slowdown in major economies, lower commodity prices, and heightened volatility in global financial markets constitute key near-term risks. Monetary policy tightening has been important to address increased risks to inflation and can be maintained at its current neutral stance. BI should stand ready to further tighten monetary policy if inflation surprises on the upside.

Keywords: PPI weight; quarterly producer price index; development agenda; GDP estimate; diversification strategy; Inflation; Financial sector stability; Commodity prices; Economic recovery; Global (search for similar items in EconPapers)
Pages: 104
Date: 2023-06-25
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