Publication: Indonesia Economic Quarterly FY14 : Compilation of the July 2013, October 2013, December 2013 and March 2014 Indonesia Economic Quarterly Reports
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2014-06
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2014-09-09
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The Indonesia Economic Quarterly (IEQ) has two main aims. First, it reports on the key developments over the past three months in Indonesia's economy, and places these in a longer term and global context. Based on these developments and on policy changes over the period, the IEQ regularly updates the outlook for Indonesia's economy and social welfare. Second, the IEQ provides a more in-depth examination of selected economic and policy issues, and analysis of Indonesia's medium-term development challenges. It is intended for a wide audience, including policymakers, business leaders, financial market participants, and the community of analysts and professionals engaged in Indonesia's evolving economy. Indonesia's fiscal and monetary policy settings will continue to play a key role in facilitating the adjustments now taking place and in minimizing associated risks. There are, however, trade-offs between the objectives of restraining inflation, supporting growth and adjusting the current account deficit to the tighter financing environment. Monetary policy faces the challenge of calibrating interest and exchange rates so as to guard against rising inflationary pressures as cost pressures rise (such as from the pass-through of the weaker currency or wage increases) while facilitating improvements in the external balances, and without unduly crimping economic growth and weakening public and private sector balance sheets. With the 2014 budget under discussion with Parliament, fiscal policy faces the challenge of slower revenue growth, and higher energy subsidy and nominal debt-financing costs, raising the importance of lifting further the quality of spending and of revenue mobilization. In response to the intensification of financial market pressures, and in conjunction with the monetary policy and currency market measures mentioned above, on August 23 the Government announced a policy package containing measures intended to improve the current account, safeguard purchasing power and facilitate growth, contain inflationary pressure, and maintain investment flows. Some of the reform measures involved retracting interventionist policies on trade and proposals for improving certainty in the business environment.
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“World Bank. 2014. Indonesia Economic Quarterly FY14 : Compilation of the July 2013, October 2013, December 2013 and March 2014 Indonesia Economic Quarterly Reports. © http://hdl.handle.net/10986/20013 License: CC BY 3.0 IGO.”
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Publication Indonesia Economic Quarterly, October 2013 : Continuing Adjustment(World Bank, Jakarta, 2013-10)The Indonesia Economic Quarterly (IEQ) has two main aims. First, it reports on the key developments over the past three months in Indonesia's economy, and places these in a longer-term and global context. Based on these developments and on policy changes over the period, the IEQ regularly updates the outlook for Indonesia's economy and social welfare. Second, the IEQ provides a more in-depth examination of selected economic and policy issues, and analysis of Indonesia's medium-term development challenges. It is intended for a wide audience, including policymakers, business leaders, financial market participants, and the community of analysts and professionals engaged in Indonesia's evolving economy. 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The improved global economic data, and diminishing fears over the risks of extreme adverse scenarios in the Euro area, US and China, coupled with accommodative monetary policy in most high income economies, have been broadly supportive of financial markets. Global equity markets rallied in the final two months of 2012 and have generally held these gains, with some developed country equity indices at or near record highs in nominal terms. Emerging market sovereign credit spreads have widened so far in 2013 but still remain close to their tightest levels since the global financial crisis.Publication Indonesia Economic Quarterly, July 2013 : Adjusting to Pressures(Washington, DC, 2013-07)The second quarter of 2013 was an eventful one as Indonesia's economy, policy settings and financial markets adjusted to pressures which have been mounting over recent quarters and to shifts in the global environment. 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First, the economy is expected to achieve higher growth targets in 2013 (5.7 percent) and 2014 (6 percent) over what it achieved in 2012 (4.6 percent), as a result of the smooth election process. However, the government will need to make a concerted effort, if it wishes to approach the 10 percent annual growth rate foreseen in Vision 2030. The report's second message emphasizes on the steps that the government needs to take to create an enabling framework for significant private sector-led growth. The Government needs to continue to invest in infrastructure, to increase domestic energy production, to address the other bottlenecks that affect the cost of doing business, and to continue following sound monetary and fiscal policies. Finally, the report's third message focuses on the poverty situation in Kenya, noting progress made since 2005, when an estimated 47 percent of the population lived below the poverty line, to the present, where poverty estimates range between 34 and 42 percent, the imprecision resulting from the lack of any recent survey data. The report notes the spatial dimension of poverty, and the poor tend to live in the arid and semi-arid regions in the north and north east. It concludes with thoughts about a poverty reduction strategy, which would emphasize on job creation, enhanced productivity of smallholder farms, strengthening and expanding cash transfer programs, targeted public spending programs to provide quality education to the rural poor, and improved poverty monitoring, so that the government can rapidly see which activities have the greatest impacts on improving the lives of the poor.Publication Global Economic Prospects, January 2013(Washington, DC, 2013-01-15)More than four years after the global financial crisis hit, high-income countries struggle to restructure their economies and regain fiscal sustainability. Developing countries, where growth is 1-2 percentage points below what it was during the pre-crisis period, have been affected by the weakness in high-income countries. To regain pre-crisis growth rates, they will need to focus on productivity-enhancing domestic policies rather than demand stimulus. Although the major risks to the global economy are similar to those of a year ago, the likelihood that they will materialize has diminished, as has the magnitude of estimated impacts should these events occur. Major downside risks include the loss of access to capital markets by vulnerable Euro Area countries, lack of agreement on U.S. fiscal policy and the debt ceiling, and commodity price shocks. In an environment of slow growth and continued volatility, a steady hand is required in developing countries to avoid pro-cyclical policy and to rebuild macroeconomic buffers so that authorities can react in the case of new external or domestic shocks.
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