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

IMF Staff Country Reports, June 25, 2023

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

Forward-looking and well-coordinated policies helped Indonesia 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.
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.

2022 outcome: healthy growth and falling inflation.
2023 projection: growth moderates slightly due to tighter domestic policy settings and the normalization of commodity prices.
Inflation projection: inflation is expected to fall within BI’s headline inflation target band in the second half of 2023.

Continued high inflation and growth slowdown in major economies.
Lower commodity prices.
Heightened volatility in global financial markets.
Overall assessment: risks are balanced but the global environment remains highly uncertain.

Monetary policy tightening has been important to address increased risks to inflation.
Current stance: can be maintained at its current neutral stance.
Recommendation: BI should stand ready to further tighten monetary policy if inflation surprises on the upside.

Source: Indonesia: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Indonesia (June 25, 2023).