A Cabinet reshuffle, at least five stimulus packages, regulatory reforms and a thoroughly battered rupiah later, Indonesia emerged from 2015 with weak consumer spending and poor gross domestic pro-duct (GDP) growth.

This year will continue to be a challenge to South-east Asia's biggest economy, given falling commodity prices, resistance to reforms, failure to revive infrastructure investment and tighter global monetary conditions, said Bank of America Merrill Lynch analysts.

A weaker currency in the light of interest rate rises in the United States is also a key risk to the economy, which is forecast by the World Bank to grow 5.3 per cent this year.

Indonesia has much to bring to the Asean Economic Community (AEC). More than half of its population of 250 million live in cities and the middle class is projected to double to 80 million by 2020.

But there are concerns that low business investment spending and unskilled workers may make Indonesia only a consumer, instead of an investor, in the AEC.

Indonesia's currency declined the most among Asian emerging markets last year. The rupiah is tipped to drop 6.2 per cent against the US dollar over the next 12 months, according to a Bloomberg survey.

"Over 2016, investment and government spending... will boost GDP growth figures, but domestic and external headwinds will remain firmly in place, suggesting that near-term economic recovery is on its way, but will be unimpressive," said BMI researcher Raphael Mok.