Southeast Asia's largest economy is likely to remain in the doldrums this year, but could rebound in the final quarter, economists told CNBC.
The past 12 months have been challenging for Indonesia after the fallout from the Federal Reserve tapering its bond-purchase program last year prompted a mass exodus from emerging market assets. Indonesia was classified as one of the 'fragile five' economies most exposed to tapering pain.
"We see little hope for an imminent turnaround," said Daniel Martin, Asia economist at Capital Economics.
"We think that tight monetary policy, along with weak demand for commodity exports, will prevent a bounce-back to the 6 percent-plus growth rates that not long ago looked like the norm," he added.
Indonesia's central bank has hiked interest rates five times since mid-2013 as it desperately tried to prop up its flailing currency, which dropped 26 percent against the U.S. dollar in 2013.
Furthermore, political uncertainty surrounding elections this year combined with a controversial mineral export ban have also proven headwinds to investment and growth.