Indonesia's economy is forecast to grow 5.7% annually this year, the first rise in economic growth rate in four years, according to the JCER. This is partly due to the end of the gasoline subsidy earlier this month by Indonesian President Joko Widodo, who took office in October last year
For years, the fuel subsidy had been squeezing the Indonesian government coffers. It was feared that a hike in gas prices would cool consumption, but cheaper crude oil prices will likely offset higher gas prices at the pump. This will allow the government to channel a budget surplus from the subsidy cut into economic stimulus policies, such as social infrastructure development.