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LPEM FEBUI Quarterly Economic Outlook 2016 Q3

Author

Listed:
  • Febrio Kacaribu

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

  • Alvin Ulido Lumbanraja

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

  • Faradina Alifia Maizar

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

Abstract

The overall sentiment in Q3 and going forward is leaning toward cautious optimism across the board. While external environment remains challenging for Indonesian economy as a whole, most of the headwinds in global macroeconomic outlook have been priced in. Several key domestic developments, such as significant improvements in Ease of Doing Business ranking, consistent business-friendly reform packages, successful Tax Amnesty program, and more realistic 2017 budget, have improved business confidence. Furthermore, global tail risks, such as risk from US election and drastic oil supply cut, have subsided considerably. We expect Q3 GDP growth to be at 5.0% level. We also expect FY2016 GDP to grow at 5.1-5.2% level and FY2017 to grow at 5.2-5.4% level, reflecting the slight pick-up of growth amidst challenging environment. We expect output from government spending in Q3 and Q4 2016 to stagnate, due to combination of significant budget cut in August and stagnant nominal spending realization in Q3 2016 compared to Q3 2015.

Suggested Citation

  • Febrio Kacaribu & Alvin Ulido Lumbanraja & Faradina Alifia Maizar, 2016. "LPEM FEBUI Quarterly Economic Outlook 2016 Q3," LPEM FEBUI Quarterly Economic Outlook 201603, LPEM, Faculty of Economics and Business, University of Indonesia, revised Mar 2016.
    • Handle: RePEc:lpe:queout:201603
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    File URL: http://www.lpem.org/repec/lpe/queouts/IEO201603.pdf
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