World Bank2014-09-092014-09-092014-06https://hdl.handle.net/10986/20013The 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.en-USCC BY 3.0 IGOACCOUNTINGASSET PRICESAUCTIONSAVAILABILITY OF CREDITBALANCE OF PAYMENTSBALANCE OF TRADEBALANCE SHEETSBANK CREDITBANK LOANBANK PROFITABILITYBANKING ASSETSBANKING SECTORBASIS POINTBASIS POINTSBENCHMARK YIELDSBENEFICIARIESBENEFICIARYBILLBOND ISSUANCEBONDSBUDGET DEFICITBUY-BACKSCAPITAL ADEQUACYCAPITAL FLOWSCAPITAL FORMATIONCAPITAL INFLOWSCAPITAL STOCKCAPITAL STOCKSCASH TRANSFERSCENTRAL GOVERNMENT FINANCINGCERTIFICATES OF DEPOSITCOMMERCIAL BANKCOMMERCIAL BANK LENDINGCOMMODITY PRICECOMMODITY PRICESCONFIDENCE INDEXCONSUMER DEMANDCONSUMER GOODSCONSUMER PRICE INDEXCONSUMPTION EXPENDITURECONSUMPTION GROWTHCONTINGENCY PLANNINGCORE INFLATIONCORPORATE BONDCORPORATE BONDSCORPORATE DEBTCORPORATE INVESTMENTCREDIT GROWTHCREDIT OUTSTANDINGCREDIT QUALITYCREDIT RISKSCURRENCYCURRENCY DEPRECIATIONCURRENCY RISKSCURRENT ACCOUNTCURRENT ACCOUNT DEFICITDEBT OUTSTANDINGDEBT REPAYMENTSDEBT SERVICEDEBT SERVICINGDEMAND FOR CREDITDEPOSITDEPOSITSDEPRECIATION RATEDEVELOPING COUNTRYDISBURSEMENTDISBURSEMENTSDOLLAR PRICEDOMESTIC BONDSDOMESTIC DEMANDDOMESTIC DEMAND GROWTHDOMESTIC SECURITIESDOWNWARD PRESSUREECONOMIC DEVELOPMENTSECONOMIC GROWTHECONOMIC SHOCKSELASTICITY OF OUTPUTEMERGING MARKETEMERGING MARKET ECONOMIESEMERGING MARKETSENABLING ENVIRONMENTEQUIPMENTEQUITIESEQUITY FINANCINGEQUITY INDICESEXCHANGE RATEEXCHANGE RATESEXPENDITUREEXPENDITURESEXPORT COMPETITIVENESSEXPORT GROWTHEXPORT REVENUESEXPORT VOLUMESEXPORTERSEXTERNAL BALANCESEXTERNAL DEBTEXTERNAL DEBTSEXTERNAL DEFICITEXTERNAL FINANCINGEXTERNAL FUNDINGFEDERAL RESERVEFINANCIAL ASSETFINANCIAL ASSETSFINANCIAL CRISISFINANCIAL MARKETFINANCIAL MARKET PARTICIPANTSFINANCIAL MARKETSFINANCING REQUIREMENTSFISCAL DEFICITFISCAL POLICYFISCAL POSITIONFIXED CAPITALFOREIGN CURRENCYFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN EXCHANGE MARKETSFOREIGN INVESTMENTFOREIGN INVESTORSGLOBAL LIQUIDITYGLOBAL TRADEGOVERNMENT BONDGOVERNMENT BOND YIELDGOVERNMENT BOND YIELDSGOVERNMENT BONDSGOVERNMENT DEBTGOVERNMENT REGULATIONGROSS DOMESTIC PRODUCTGROWTH RATEHEDGESHUMAN CAPITALILLIQUIDITYIMPORTIMPORT DEMANDIMPORTSINCOME GROWTHINCOME TAXESINFLATIONINFLATIONARY EXPECTATIONSINFLATIONARY PRESSUREINFLATIONARY PRESSURESINFRASTRUCTURE INVESTMENTINFRASTRUCTURE INVESTMENTSINTEREST PAYMENTSINTEREST RATEINTEREST RATESINTERNAL AUDITINTERNAL FINANCINGINTERNATIONAL BANKINTERNATIONAL FINANCIAL MARKETINTERNATIONAL MARKETINTERNATIONAL TRADEINVESTMENT ACTIVITYINVESTMENT DEMANDINVESTMENT FLOWSINVESTMENT INFLOWSINVESTMENT LEVELSINVESTMENT LOANSINVESTMENT SPENDINGINVESTOR CONFIDENCELIQUIDITYLIQUIDITY MANAGEMENTLIQUIDITY RISKSLOANLOAN APPROVALSLOCAL CURRENCYLOCAL GOVERNMENTSMACROECONOMIC POLICYMARKET DEVELOPMENTSMARKET YIELDSMATURITYMONETARY POLICYNON-PERFORMING LOANSOIL COMMODITYOIL COMMODITY PRICESOIL PRICEOIL PRICESPOLICY RESPONSESPOLITICAL UNCERTAINTYPORTFOLIOPORTFOLIO INVESTMENTPORTFOLIOSPOST OFFICEPOVERTY REDUCTIONPRICE INCREASESPRIVATE DEBTPUBLIC FUNDSPUBLIC INVESTMENTPURCHASING POWERREPAYMENTRESERVERESERVE REQUIREMENTRESERVE REQUIREMENTSRESERVESRESIDENTIAL MORTGAGESRETURNSAVINGS ACCOUNTSHORT-TERM EXTERNAL DEBTSTOCK MARKETSTOCK PRICESTRONG COMMODITYSUSTAINABLE GROWTH RATESWAPTAXTERM DEPOSITTOTAL EXPORTSTRADE BALANCETRADE FINANCETRADE RESTRICTIONSTRADINGTRADING PARTNERTRADING PARTNERSTREASURYTREASURY BONDTREASURY BOND YIELDTREASURY NOTEUNEMPLOYMENT RATEVALUATIONVOLATILITY OF CAPITALWARRANTSWEALTH EFFECTSWORKING CAPITAL10.1596/20013