Indonesia’s real GDP will rise by 5.2% in 2016, up from an estimated 4.8% in 2015, according to The Economist Intelligence Unit. The rate of expansion will pick up further in 2017-20 but looks set to remain below potential, averaging 5.4% a year, owing to slow progress on structural reform.
Some of President Joko Widodo’s actions over the past few months—such as a cabinet reshuffle that favoured technocrats and a raft of deregulation measures—suggest that the pace of reform may be picking up. Yet critics charge that this is merely tinkering around the edges that won’t provide the sort of boost Indonesia’s economy so sorely needs. Will 2016 be a year of structural reform?
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