Indonesia could see growth of more than 5 per cent in the second half of the year, President Joko Widodo said yesterday, forecasting a pick-up from a tepid first half that has seen analysts cut their full-year outlook for South-east Asia's biggest economy.
There is also no fear that the region is facing a situation similar to the Asian financial crisis of the late 1990s, Mr Joko, 54, said.
"Growth will be... more than 5 per cent," he said in an interview with The Straits Times at the Bogor Palace yesterday. "We have done our calculations. Spending from our national budget is going up and consumer confidence also is rising. Growth will increase."
He was speaking on the eve of a visit to Singapore, and made a pitch to Singapore businesses to be part of his country's growth story, emphasising his seriousness in making infrastructure building the hallmark of his term in office.
Pointing to the "excellent" ties between the two countries, Mr Joko said he plans to use his visit tomorrow to Singapore, Indonesia's largest investor, to convince companies to plant more money and boost tourism in his nation.
He said investment and tourism between the two countries have room to grow. "I will continue my discussions with PM Lee (Hsien Loong) first, and then with Madam Ho Ching (the CEO of Temasek Holdings), on how to strengthen our relationship and cooperation.
"I am sure when we explain to the investors in Singapore, they will come... Our explanation to them will give confidence," he said.
"I am sure that if we can have stability... the second step is how to get our infrastructure on the right track. We want Singapore to continue to look at Indonesia as an economic partner."
Mr Joko's optimism contrasts with an increasingly gloomy regional outlook marked by a drop-off in exports as a result of the slowing Chinese economy.
Several economies in the region have slowed while the Indonesian rupiah and the Malaysian ringgit have been battered. That has led some analysts to suggest that Mr Joko should moderate the expectations of Indonesians on the 7 per cent growth he pledged while running for the presidency.
Mr Joko took charge of Indonesia amid widespread expectations that he would succeed in cutting through the stifling bureaucracy and corruption that have held down growth. But nine months into his term, doubts are rising about his ability to push through change. Indonesia's first- quarter growth, at 4.7 per cent, was the slowest in six years.
He conceded that the bureaucracy was the principal stumbling block to his reform plans, which include building ports and roads to connect the sprawling archipelago.
But he made plain his determination to push ahead. "I have 10 years of experience with the bureaucracy, I know how to push them," he said, adding that he is preparing regulations to accelerate the disbursement of project funds.