Indonesia Economic Development December 2009
Indonesia was named the region most active business reformer in East Asia and the Pacific according to Doing Business Index 2010 surveyed by the International Finance Corporation (IFC). Indonesia’s rank in the index moved up from 129 to 122.
Indonesia’s rank in The Global Competitiveness Index (GCI) 2009-2010 moved up from 55 to 54 (score 4.26) which is the third consecutive rank increase since 2007. The increase mainly supported from business establishment factor and innovation factor.
Indonesia has been one of the few countries leading the economic recovery, with a resilient growth over the last 2 years. Indonesia is one of the rare countries which successfully posted a positive growth rate in 2009, the third fastest growing economy in the G20. Even during the worst of the global economic slow down, the economy was still able to generate a positive growth of 4.4% in Q1-2009, 4.0% in Q2-2009, and 4.2% in Q3-2009. For overall 2009 we expect to record growth within the range of 4–4.5%.
Banking industry has stayed resilient with high level of CAR (17.6%) and NPL (gross) at a subdued level 0f 4.3% and net at 1.2% (latest data as of October 2009).
By end of the Q3-2009, Indonesia's overall balance of payments recorded a surplus of US$3.5 billion (Q2-2009:US$1.1 billion), resulted from surpluses in both the current account as well as the capital and financial account.
International reserves reached US$66.85 billion as of end of November 2009, equivalent to about 6.5 months of imports and official debt service payments.
The rupiah exchange rates have been showing an appreciation trend, mainly supported by continuing of global economic recovery and domestic economic performance. During Q4-2009 (up to end of November) rupiah appreciated from 5.39% to Rp 9,463 against USD. Rupiah continues appreciated to Rp 9,436 against USD as per December 4th, 2009.
Up to end of November 2009, the CPI recorded 0.03% deflation (m-t-m) alongside annual inflation at 2.41% (y-o-y). Accordingly, potential inflation in 2009 to come below the BI inflation target set at 4.5%±1%.
The latest monthly Board of Governors’ Meeting convened in December 2009 decided to leave BI Rate unchanged at 6,50%, which is considered adequate to the economic recovery process.
Fiscal policy is taking into account the need to stimulate the economy and will continue at as lower pace in 2010.Tax policy reform continues with lower tariff and higher compliance.
2010 Budget provides fiscal space to implement priority programs of the government.
Going forward, dramatic slow in world economy pose significant challenges to the economy in 2009.
Further information could be obtained at:
source: Bank Indonesia-London