percentage points in 2016 and unchanged in 2017. 6. under this backdrop of sluggish growth, most central banks in advanced economies have set an accommodative monetary policy and even negative policy rates in order to boost the economy and escape the deflation trap. while there has been a downward pressure on global interest rates due to slow growth, heightened uncertainty following the “ trump fever ” have led to further volatility that is caused by movements in the global capital flow. 7. global investors are speculating against trump ’ s expansionary fiscal policy that is expected to drive higher economic growth and inflation, page 2 of 5 pre annual investment 2017 beyond the current fed inflation target. meanwhile, us treasuries 10 year yield has strengthen to its highest level in a week of about 11 %. movements in global capital flow which has a significant impact to exchange rate and global financial market volatility will greatly affect the way central banks manage their reserves. distinguished guests, ladies and gentlemen, now, allow me to talk about the developments in our domestic market. 8. i will start by highlighting the uniqueness of indonesia given the indonesia ’ s national motto, unity in diversity. indonesia is the largest economy in south east asia. the world ’ s fourth most populous country which approximately 64 % of the population are in productive age, growing middle class income, and entering a period of political consolidation in an open and free democracy. all of which has gone hand in hand with positive economic performance. 9. we believe the impact of brexit and the new president of united states to the indonesian economy are relatively limited as the economy remains on strong grip. indonesia ’ s economy performs relatively well in 2016. in the 2nd quarter of 2016, economic growth picked up to 5. 18 %, higher than it was in the 1st quarter of 2016 at 4. 91 %. the economic growth of 2016 is expected to be in the range of 4. 9 to 5. 3 %. this is supported by fiscal stimulus to accelerate infrastructure project developments. private investment is expected to rise as well as a result of government policy packages and measurable monetary easing. we expect inflation to be within the targeted range of 4 ± 1 % as well as the current account deficit maintained below 3 % of gdp. credit growth is expected in the range of 7 - 9 % supported by monetary easing, macroprudential loosening and acceleration of fiscal stimulus. page 3 of 5 pre annual investment 2017 10. indonesia ’ s tax

the pattern of our international trade. previously, our trade was predominantly with the major developed economies. now, almost two - thirds of our trade is with asia. as the asian markets continue to expand and as the trade increases, it becomes a mutually reinforcing trend in the region. thirdly, our economic structure has become increasingly more diversified with new areas of comparative advantages emerging. as this occurs, we are seeing the increased two way flows of investment, financial flows and talent. with full employment, activities requiring low labour cost are no longer our comparative advantage. both multi - nationals and domestic corporations in such activities have since the 1990s relocated to other parts of the region. resources are now redeployed to new areas of comparative advantage which are generating new areas of growth. as part of this transformation, the services sector has continued to become an important driver of growth, reflecting the flexibility and agility of the economy to shift resources to new areas of growth. while malaysia continues to be a recipient of foreign direct investment amounting to 7. 2 % of gnp, outward foreign direct investment by malaysian corporations account for 6. 9 % of gnp. the financial landscape has also been dramatically transformed to become more diversified, more market oriented and more liberalised. the sector has also evolved from being fragmented to becoming more consolidated, operating with higher levels of efficiency. there are also stronger international linkages not only in terms of increased foreign presence in our financial system but also our financial institutions are increasingly venturing abroad. this trend has increased our international inter - linkages resulting in greater economic and financial integration with the global economy and international financial system. new areas of growth are also emerging in the financial system including in investment banking and islamic finance. the development of our domestic financial markets, and the more liberalised environment has contributed to increased two - way flow of funds. these two - way flows have promoted the orderly functioning of our foreign exchange market. in addition, the more diversified financial markets have in turn reduced our vulnerability to extreme volatility. these transformations have brought about significant payoffs for our nation. today, the income per capita exceeds usd7, 000, double of what it was seven years ago in 2001. with the increased resilience, the future prospects remain positive with the economy on a steady growth path going forward. there is however, significant uncertainty in the global economy in the current environment, with some of the largest economies in the world bracing for slower growth and continued turmoil in the financial