{
  "title": "IMF Executive Board Concludes 2022 Article IV Consultation with Indonesia",
  "publication": "IMF News, March 22, 2022",
  "sourceUrl": "https://www.imf.org/en/news/articles/2022/03/22/pr2284-imf-executive-board-concludes-2022-article-iv-consultation-with-indonesia",
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  "summary": "IMF staff project GDP growth at 5.4 percent for 2022 and 6.0 percent in 2023.",
  "publishDate": "2022-03-22",
  "sections": [
    {
      "heading": "Economic outlook and growth projections",
      "content": "- IMF staff project GDP growth at 5.4 percent for 2022 and 6.0 percent in 2023.\n- Recovery drivers identified: favorable global commodity prices, easing restrictions on activity, continued policy support, rising mobility and confidence as the vaccination program expands into more remote areas.\n- Delta variant surge slowed the recovery in mid‑2021; growth picked up in the fourth quarter of 2021.\n- Inflation: expected to rise gradually within the inflation target range in 2022; consumer prices (end period) reported as 3.2 (2018), 2.6 (2019), 1.7 (2020), 1.9 (2021), 3.5 (2022).\n- Outlook: improving but with the balance of risks tilted to the downside."
    },
    {
      "heading": "Executive Board assessment and policy stance",
      "content": "- Directors commended authorities for maintaining macroeconomic and financial stability during COVID‑19, aided by substantial policy buffers from years of strong macroeconomic performance.\n- Consensus: gradual phase-out of exceptional policy support as recovery takes hold; continued push on structural reforms.\n- Fiscal policy:\n  - Gradual withdrawal of fiscal support deemed appropriate.\n  - Restoring the pre-pandemic 3 percent of GDP budget deficit ceiling in 2023 recommended to bolster credibility and sustainability of the fiscal framework.\n  - Support for developing a medium-term revenue strategy to finance high priority spending.\n  - Savings from energy subsidy reforms could be used to strengthen the social safety net.\n- Monetary policy and markets:\n  - Monetary policy has remained appropriately accommodative to support recovery.\n  - Directors urged authorities to stay ahead of the curve and closely monitor inflation and inflation expectations to keep them well anchored.\n  - Encouraged ending central bank primary market purchases and allowing the policy rate to provide a clearer signal of monetary stance.\n  - Highlighted the role of exchange rate flexibility in absorbing shocks.\n- Financial sector:\n  - Indonesian financial sector remains stable; intensive supervision necessary while crisis-related regulatory relief is in place.\n  - Welcomed efforts to promote financial deepening and inclusion, including digitalization and credit information sharing.\n- Structural reforms:\n  - Commended ambitious reform agenda; encouraged maintaining momentum on labor and financial market reforms to increase investment, boost growth, and mitigate scarring from the pandemic.\n  - Recommended improvements to education, women’s labor force participation, and governance frameworks to support medium-term growth.\n  - Climate change: welcomed mitigation measures and encouraged further reforms including energy subsidy reform, carbon pricing and emission trading system measures, and fostering a green financial market."
    },
    {
      "heading": "Key statistics and selected indicators (as reported)",
      "content": "- Real GDP (percent change):\n  - 2018: 5.2\n  - 2019: 5.0\n  - 2020: -2.1\n  - 2021 Est.: 3.7\n  - 2022 Proj.: 5.4\n  - 2023 Proj.: 6.0\n- Domestic demand:\n  - 2018: 6.3\n  - 2019: 4.0\n  - 2020: -3.8\n  - 2021 Est.: 2.9\n  - 2022 Proj.: 4.7\n  - 2023 Proj.: 6.1\n- Private consumption (Includes NPISH consumption):\n  - 2018: 5.1\n  - 2019: -2.7\n  - 2020: 2.0\n  - 2021 Est.: 4.9\n  - 2022 Proj.: 5.9\n- Gross fixed investment:\n  - 2018: 7.9\n  - 2019: 4.5\n  - 2020: -5.0\n  - 2021 Est.: 3.8\n  - 2022 Proj.: 7.1\n- Gross investment (in percent of GDP):\n  - 2018: 34.6\n  - 2019: 33.8\n  - 2020: 32.4\n  - 2021 Est.: 31.5\n  - 2022 Proj.: 31.0\n  - 2023 Proj.: 31.3\n- Gross national saving (in percent of GDP):\n  - 2018: 31.6\n  - 2019: 31.1\n  - 2020: 31.9\n  - 2021 Est.: 29.8\n- Consumer prices (period average):\n  - 2018: 2.8\n  - 2019: 1.6\n- Public finances (in percent of GDP):\n  - General government revenue: 2018: 14.9; 2019: 14.2; 2020: 12.5; 2021 Est.: 13.6; 2022 Proj.: 13.2\n  - General government expenditure: 2018: 16.6; 2019: 16.4; 2020: 18.6; 2021 Est.: 18.2; 2022 Proj.: 17.1; 2023 Proj.: 16.2\n  - Of which: Energy subsidies: 0.7 (2018), 0.8 (2019)\n  - General government balance: 2018: -1.8; 2019: -2.2; 2020: -6.1; 2021 Est.: -4.6; 2022 Proj.: -4.0; 2023 Proj.: -3.0\n  - Primary balance: -0.5 (2018), -4.1 (2019), -2.6 (2020), -1.3 (2021)\n  - General government debt: 2018: 30.4; 2019: 30.6; 2020: 39.8; 2021 Est.: 42.8; 2022 Proj.: 42.9\n- Monetary aggregates and credit (12-month percent change; end of period):\n  - Rupiah M2: 2018: 6.5; 2019: 13.9; 2020: 8.4; 2021 Est.: 9.0\n  - Base money: 2018: 0.2; 2019: 19.3; 2020: 8.8; 2021 Est.: 8.8\n  - Claims on private sector: 2018: 10.3; 2019: 5.8; 2020: -0.4; 2021 Est.: 9.2; 2022 Proj.: 9.7\n- Balance of payments (in billions of U.S. dollars, unless otherwise indicated):\n  - Current account balance: 2018: -30.6; 2019: -30.3; 2020: -4.5; 2021 Est.: -0.8; 2022 Proj.: -20.6\n  - Trade balance: 2018: 28.2; 2019: 43.9; 2020: 43.3; 2021 Est.: 25.9; 2022 Proj.: 0.3\n  - Of which: Oil and gas (net): 2018: -11.4; 2019: -10.3; 2020: -5.4; 2021 Est.: -9.7; 2022 Proj.: -6.7; 2023 Proj.: -11.5\n  - Inward direct investment: 2018: 20.6; 2019: 23.9; 2020: 18.5; 2021 Est.: 20.2; 2022 Proj.: 22.1; 2023 Proj.: 24.5\n  - Terms of trade, percent change (excluding oil): 2018: -2.3; 2019: -5.6; 2020: 8.9; 2021 Est.: -2.8\n  - Gross reserves (in billions of U.S. dollars, end period): 2018: 120.7; 2019: 129.2; 2020: 135.9; 2021 Est.: 144.9; 2022 Proj.: 159.1; 2023 Proj.: 169.9\n  - Gross reserves (in months of prospective imports of goods and services): 2018: 7.4; 2019: 7.3\n  - As a percent of short-term debt: 2018: 201; 2019: 204; 2020: 209; 2021 Est.: 213; 2022 Proj.: 224; 2023 Proj.: 226\n  - Total external debt (in billions of U.S. dollars): 2018: 375.4; 2019: 403.6; 2020: 417.0; 2021 Est.: 436.8; 2022 Proj.: 454.4; 2023 Proj.: 488.1\n  - Total external debt (in percent of GDP): 2018: 36.0; 2019: 39.3; 2020: 36.8; 2021 Est.: 35.4; 2022 Proj.: 34.8\n- Exchange rate:\n  - Rupiah per U.S. dollar (period average): 2018: 14,235; 2019: 14,152; 2020: 14,529; 2021 Est.: 14,297\n  - Rupiah per U.S. dollar (end of period): 2018: 14,390; 2019: 13,866; 2020: 14,050; 2021 Est.: 14,253\n- Memorandum items:\n  - Jakarta Stock Exchange (12-month percentage change, composite index): 2018: -2.5; 2019: -5.1; 2020: 10.1\n  - Oil production (thousands of barrels per day): 2018: 810; 2019: 805; 2020: 806; 2021 Est.: 803; 2022 Proj.: 800; 2023 Proj.: 797\n  - Nominal GDP (in trillions of rupiah): 2018: 14,839; 2019: 15,833; 2020: 15,438; 2021 Est.: 16,971; 2022 Proj.: 18,471; 2023 Proj.: 20,220"
    },
    {
      "heading": "Policy recommendations and priorities",
      "content": "- Gradually phase out exceptional pandemic-era policy support while restoring fiscal rules (3 percent of GDP deficit ceiling in 2023).\n- Develop and implement a medium-term revenue strategy to finance high priority spending.\n- Reallocate savings from energy subsidy reforms to strengthen the social safety net.\n- End central bank primary market purchases and let the policy rate signal monetary stance; maintain accommodative stance while guarding inflation expectations.\n- Maintain intensive supervision of the financial sector until crisis-related regulatory relief is removed; promote financial deepening and inclusion via digitalization and credit information sharing.\n- Advance labor and financial market reforms, education improvements, higher women’s labor force participation, governance reforms, and further climate-related policies including energy subsidy reform, carbon pricing, emission trading system measures, and fostering a green financial market.\n\nSource: Press Release No. 22/84, March 22, 2022, IMF Communications Department.\n\n---\n\n\n References\n\n- Indonesia and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2022/03/22/pr2284-imf-executive-board-concludes-2022-article-iv-consultation-with-indonesia"
    }
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    "Published: March 22, 2022",
    "IMF staff project GDP growth at 5.4 percent for 2022 and 6.0 percent in 2023.",
    "Recovery drivers identified: favorable global commodity prices, easing restrictions on activity, continued policy support, rising mobility and confidence as the vaccination program expands into more remote areas.",
    "Delta variant surge slowed the recovery in mid‑2021; growth picked up in the fourth quarter of 2021.",
    "Inflation: expected to rise gradually within the inflation target range in 2022; consumer prices (end period) reported as 3.2 (2018), 2.6 (2019), 1.7 (2020), 1.9 (2021), 3.5 (2022).",
    "Outlook: improving but with the balance of risks tilted to the downside.",
    "Directors commended authorities for maintaining macroeconomic and financial stability during COVID‑19, aided by substantial policy buffers from years of strong macroeconomic performance.",
    "Consensus: gradual phase-out of exceptional policy support as recovery takes hold; continued push on structural reforms.",
    "Fiscal policy:",
    "Monetary policy and markets:",
    "Financial sector:",
    "Structural reforms:",
    "Real GDP (percent change):",
    "Domestic demand:",
    "Private consumption (Includes NPISH consumption):",
    "Gross fixed investment:",
    "Gross investment (in percent of GDP):",
    "Gross national saving (in percent of GDP):",
    "Consumer prices (period average):",
    "Public finances (in percent of GDP):",
    "Monetary aggregates and credit (12-month percent change; end of period):",
    "Balance of payments (in billions of U.S. dollars, unless otherwise indicated):",
    "Exchange rate:",
    "Memorandum items:",
    "Gradually phase out exceptional pandemic-era policy support while restoring fiscal rules (3 percent of GDP deficit ceiling in 2023).",
    "Develop and implement a medium-term revenue strategy to finance high priority spending.",
    "Reallocate savings from energy subsidy reforms to strengthen the social safety net.",
    "End central bank primary market purchases and let the policy rate signal monetary stance; maintain accommodative stance while guarding inflation expectations.",
    "Maintain intensive supervision of the financial sector until crisis-related regulatory relief is removed; promote financial deepening and inclusion via digitalization and credit information sharing.",
    "Advance labor and financial market reforms, education improvements, higher women’s labor force participation, governance reforms, and further climate-related policies including energy subsidy reform, carbon pricing, emission trading system measures, and fostering a green financial market.",
    "[Indonesia and the IMF](http://www.imf.org/external/country/IDN/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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