2018, Economic Growth Targeted at 5.4 Percent

Up to the third quarter of 2017, the domestic economy grew by only 5.03 percent. In 2018, the government targeted economic growth of 5.4 percent. The target unemployment rate was to decrease to 5.0-5.3 percent, the poverty rate to 9.5-10 percent, and the Gini ratio (inequality) to 0.38.

(Read Databoks: 2017, Indonesia's Economy Stagnated)

However, the 5.4 percent economic growth target for the following year was considered too high, and economists were pessimistic about its achievability. Several economists and institutions predicted that the economy would only grow by 5.3 percent the following year. Meanwhile, Bank Indonesia targeted domestic economic growth of 5.8-6.2 percent in 2018. This target was based on the policies already implemented and the structural reforms undertaken.

The following are the macroeconomic assumptions in the 2018 State Budget (APBN): Economic growth of 5.4 percent, inflation rate (YoY) of 3.5 percent, rupiah exchange rate of Rp 13,400 per US dollar, and SPN interest rate of 5.2 percent. Furthermore, the oil price was assumed to be US$ 48 per barrel, oil lifting at 800,000 barrels per day, and gas lifting at 1.2 million barrels per day.