Indonesia says domestic market to shelter economy from trade war

Indonesian Finance Minister Sri Mulyani Indrawati said the country relies less on exports compared with others in the region, with consumption accounting for more than half of gross domestic product.
Indonesian Finance Minister Sri Mulyani Indrawati said the country relies less on exports compared with others in the region, with consumption accounting for more than half of gross domestic product.PHOTO: REUTERS

JAKARTA (BLOOMBERG) - Indonesia's economy may be cushioned by its huge domestic market as a trade dispute between the US and China poses risks to the global economic recovery, according to Finance Minister Sri Mulyani Indrawati.

South-east Asia's largest economy relies less on exports compared with others in the region, with consumption accounting for more than half of gross domestic product, Indrawati said in an interview with Bloomberg TV in Singapore on Thursday (April 5). The government is also looking to boost investment to support growth, she said.

The brewing trade war between the US and China has raised concerns about potential fallout for South-east Asia's economies, many of which count China as their main trading partner.

China on Wednesday said it would levy an additional 25 per cent tariff on about US$50 billion (S$65.7 billion) of US imports, matching the scale of the Trump administration's proposed tariffs.

"This kind of practice or policy, which is bad for both sides, is not going to serve their interests, or the world economy," Indrawati said.

The US and China should seek a resolution to their trade disputes through the World Trade Organization, said Indrawati, a former World Bank managing director.