Indonesia could overtake Britain to become the world's 7th largest economy by 2030 - if it raises its growth rate to take advantage of a rapidly expanding consumer class, the McKinsey Global Institute said on Tuesday.
The Institute, linked to management consultant McKinsey & Co, said Indonesia's young population, ongoing urbanization and growing middle class incomes favoured its growth prospects.
Indonesia has sustained GDP growth over 5 per cent per year but it had to grow at 6 per cent annually to achieve the target the report said was possible.
The economy grew at a stronger-than-expected 6.4 per cent last quarter, defying a global downturn, in part because of domestic consumption by the expanding middle class and also investment.
Indonesia, a secular state, is the world's fourth biggest by population and has the world's 16th largest economy. It is the biggest economy in Southeast Asia and in December and January was awarded investment grade debt status by two ratings agencies.
"We will need to add 60 million skilled and semi-skilled workers over the next two decades. This is a big amount. We need to get the number in addition to the quality of workers," Arief Budiman, president-director of PT McKinsey Indonesia told Reuters.
The government has changed its plan to build a new port in Cilamaya and is seeking a better location in Subang or Indramayu, West Java.
Vice President Jusuf Kalla said the government needed to build a new port but it would not be in Cilamaya.
The Vice President, who visited Cilamaya with several ministers, including Coordinating Maritime Affairs Minister Indroyono Susilo and Transportation Minister Ignasius Jonan on Thursday, said the new port would be built east of Cilamaya, either in Subang or Indramayu.
Kalla said the main reason to move the new port’s location to another regency was because waters in the area were already crowded by offshore mining activities and oil tankers transporting crude oil to Jakarta and other cities.
The government has allocated Rp 34.5 trillion (US$2.6 billion) to construct a new port, as Tanjung Priok Port is deemed too crowded.
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South Korean steelmaker POSCO will almost double its investment in Indonesia to $11 billion over the next five years, from $6 billion currently, Chief Economics Minister Hatta Rajasa said on Friday. The world's fourth-biggest steelmaker, already has a multi-billion dollar joint venture with Indonesian state-owned PT Krakatau Steel, the country's biggest steel producer. Earlier this year, the South Korean firm's affiliate POSCO Engineering & Construction, formed a consortium to build two 300-megawatt power plants on Indonesia's Sumatra island, worth around $1 billion. A POSCO spokesman in Seoul said the South Korean firm has yet to make detailed investment commitments in Indonesia, and noted other partners would jointly invest in any projects. Foreign direct investment in Indonesia stayed strong in the second quarter, showing the G20 member remained a magnet in a troubled global economy and that changes in mining ownership rules are not cutting i…
Inflation increased slightly in March, data from the Central
Statistics Agency, or BPS, showed on Wednesday, as prices were pushed up
by higher prices for fuel and rice and continued weakening of the
Analysts said stronger inflation would limit Indonesia’s central bank’s ability to further reduce its key interest rate. The BPS announced March’s headline inflation rate was 6.38 percent, compared with 6.29 percent a month earlier.
“This is broadly in line with our forecast and the consensus median,”
said Dian Ayu Yustina, a Jakarta-based economist with Bank Danamon
The administration of President Joko Widodo has reformed the fuel
price policy to a regulated price that can fluctuate according to the
global oil price and the exchange rate.
Looking forward to the rest of the year, analysts Wai Ho Leong and
Angela Hsieh from Barclays said the path of inflation was still benign.