Jakarta. Indonesia still has the opportunity to become one of the top 10 world economies by 2030, even with the country’s current growth constraints amid global uncertainty, consulting firm McKinsey says.
“Despite being in a difficult situation, Indonesia is the most stable economy in the world by far,” Guillaume de Gantes, a partner at McKinsey Indonesia, said at the Indonesia Economic Forum 2015 in Jakarta on Wednesday.
“If we project growth, Indonesia is still going to make it to the top ten economies in the world in 2030,” he added.
De Gantes stressed that increasing productivity among the country’s massive middle class was the key to unleashing this potential. He noted that productivity in Indonesia was low compared to regional peers, driven as it was mainly by the shift between economic sectors, including from agriculture to manufacturing.
By comparison, Singapore has been largely successful in boosting the productivity of its workforce within specific sectors, such as banking, de Gantes said.
“Today’s more challenging economic situation is a call to action to improve productivity,” he added, calling on the government to improve education and use technology to achieve higher productivity.
Indonesia’s economy grew at an annualized rate of 4.73 percent through the third quarter of 2015, one of its weakest paces in six years.
The government expects full-year growth of 4.8 percent, a steep cut from the initial target of 5.7 percent in the revised 2015 state budget set in February this year.
It eyes growth next year of 5.3 percent, betting on higher public and household spending supported by a series of stimulus packages rolled out since September and a boom in public works projects.