By I Made Sentana

JAKARTA--The International Monetary Fund Thursday offered a positive take on the Indonesian economy, praising authorities there for having "skillfully" navigated recent global economic uncertainties.

"The Indonesian economy continues to perform well, supported by a prudent mix of macroeconomic policies and structural reforms," the multilateral lender said in press release after finishing a consultation with the government, Bank Indonesia, and various representatives from the private and academic sectors.

The IMF predicts Indonesia's economy, the largest in Southeast Asia, to grow by 5% this year and 5.1% in 2017, as inflation there has dropped significantly and the current-account deficit has been contained.

"Downside risks to the outlook are largely external, stemming from uncertainties about policies of the next US administration, tighter global financial conditions, slower-than-expected growth in China, a faster pace of monetary tightening in the US, and a renewed fall in commodity prices," the IMF said.

Meanwhile, domestic risks include a smaller fiscal buffer, reflecting tax-revnue shortfall or higher domestic interest rates due to tighter global financial conditions, it said.

The IMF called Bank Indonesia's current monetary stance "appropriate", and welcomed the central bank's decision last week to keep the policy rate unchanged given the uncertain external environment.

Write to I Made Sentana at I-made.sentana@wsj.com

(END) Dow Jones Newswires

November 24, 2016 03:36 ET (08:36 GMT)

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