View of Jakarta, Indonesia.

Indonesia’s central bank sees higher GDP growth for 2017, but tempered expectations, saying that 5.4% may be out of reach.

Bank Indonesia’s deputy governor Mirza Adityaswara, as quoted by Straits Times, also pointed to the need for a higher credit rating for Indonesia to compete with other Southeast Asian nations:

“In our view, the 2017 growth rate should be higher than 2016’s… Maybe 5.4 per cent is still a bit too aggressive, but we think 5.1 to 5.2 per cent is still a possible number to achieve in 2017…

We have to use the improvement in the credit rating to challenge ourselves to get further improvement…

Considering that the global situation is quite stable, what we can expect is funds from Japan, and also funds from maybe European and American pension funds…

The key is to maintain prudentiality in managing the macro. The government manages the fiscal prudentiality, while Bank Indonesia maintains prudentiality in the monetary policy, basically to make sure inflation is under control and the current account deficit is under control.”

Economists surveyed by Bloomberg agree with Bank Indonesia, forecasting the economy to expand at a rate under 5.5% through 2019. The benchmark index for Indonesia’s stock exchange is up 11% over the past six months.