Improved fiscal management is supporting Indonesia's economic growth, the World Bank said in a report released Tuesday.
The Washington-based lender said higher than previously estimated revenue from the tax amnesty program has eased fiscal risks, along with adjustments to government expenditures.
The additional revenue collected by the amnesty program is likely to lift capital spending and hence have a positive impact on growth, the bank said.
"Improved fiscal management, sounder public policy and structural reforms, including timely responses on food prices, are yielding positive outcomes," Rodrigo Chaves, World Bank Country Director for Indonesia, said.
"Looking forward, we are optimistic that ongoing efforts to develop tourism and manufacturing will result in more jobs, boost export earnings, and further support growth," Chaves added.
Nonetheless, the agency cautioned that external risks such as weaker than expected global growth and volatility in global financial markets pose downside risks to Southeast Asia's largest economy.
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