Indonesia    (An  Emerging  Economy)  

Indonesia  Export  Commodi1es  •  Oil  and  gas  •  Electrical  appliances  •  Plywood  •  Tex;les  •  Rubber  

Indonesia  Import  Commodi1es  •  Machinery  and  equipment  •  Chemicals  •  Fuels  •  Foodstuffs  

Indonesia:  

Macro  economic  view  of  Indonesia  

Introduc;on  

It  is  an  archipelago  with  over  238  million  people,  and  is  world’s  4th  most  populous  na;on.    Ø   Indonesia  currently  targets  a  2012  budget  deficit  of  190.1  trillion  rupiah,  on  capital  spending  of  168.8  trillion  rupiah  Ø   As  exports  have  fallen  in  the  current  slowdown  of  world  economy,  the  main  thrust  of  Indonesian  government    is  to  boost  domes;c  consump;on  and  investment.  Ø   Southeast  Asia's  largest  economy  may  expand  at  the  lower  range  of  Bank  of  Indonesia's  forecast  of  about  6.3  per  cent  to  6.7  per  cent  in  2012  Ø   Investment  and  domes;c  consump;on  in  Indonesia  contributed  87%  to  the  country’s  growth  in  the  1st  quarter  of  2012.  Ø   Standard  &  Poor's  kept  Indonesia's  ra;ng  unchanged  at  BB+    

Period of 1961 - 1970

Ø  initiation of Indonesian independence Ø  huge chaos of social and politics Ø  economic only grew on average 3,94%, even in 1963 touched minus 2,24% Ø  inflation rate on average touched the highest point (194,02 %)

Period of 1971 - 1997

Ø  government  concentrated  to  improve  people  welfare  through  economic  development  by  recovering  economy,  social,  and  poli;c  situa;on  Ø  increase  economy  rate  of  growth  to  7,  44  %  in  1971-­‐1981,  5,  51  %  in  1981-­‐1990;  and  6,  88  %  in  1990-­‐1997  respec;vely  Ø  great  revenues  from  oil  export  when  oil  boom/  oil  crises  occurred

Period of 1998 - 2007

Ø  faced  a  big  economic  turbulence  that  trigger  economic  crisis  Ø  Indonesian  currency  was  pushed  down  with  exchange  value  above  10.000  per  US$.  Ø  The  GDP  growth  in  1998  went  down  to  minus  13,  31%,  substan;ally  lower  than  the  average  growth  rate  in  1960-­‐1971  

Period of2008 - 2010

Ø  GDP  growth  rate  in  2008  increased  to  6,01  Ø  GDP  growth  rate  recovered  significantly  to  6,  10  %  in  2010  Ø  infla;on  rate  was  not  too  high

In this period Indonesia established reformation and economic stabilization program strictly to raise the GDP growth rate.

The biggest contribution was from manufacturing industry with average contribution around 27,4 %

Ø  GDP growth in Indonesia continued to grow significantly, although a few years ago, suffering from shock (negative growth of GDP). This is evidenced by increasing the real value of Indonesia's GDP from year to year Ø  Inflation rate in Indonesia despite fluctuating but it is still maintained and quite well controlled by government to support good economic performance. This can be seen from the exchange rate and prices of goods remained stable in recent years

 Ø   Corrup;on.  Though  figure  of  Indonesia  in  the  corrup;on  percep;on  index  has  improved  from  2.8  in  2010  to  3.0  in  2011,  much  s;ll  need  to  be  done.  Ø   Unemployment rate is still quite high, although there is a tendency to decline in the last 5 years. Work participation rate is still pretty good (above 60%), and the employment rate has reached above 90% of the total labor force. Ø  Domestic consumption and exports remains the largest contributor to Indonesia's GDP and this needs to be improved, particularly for domestic consumption. As we know, high domestic consumption is quite good in warding off the economic crisis because national economy is not too dependent on the influence of foreign markets  

Challenges:    

Ø  GDP growth in Indonesia continued to grow significantly, although a few years ago, suffering from shock (negative growth of GDP). This is evidenced by increasing the real value of Indonesia's GDP from year to year Ø  Inflation rate in Indonesia despite fluctuating but it is still maintained and quite well controlled by government to support good economic performance. This can be seen from the exchange rate and prices of goods remained stable in recent years

Conclusion