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Developments in Monetary Sector 2013:Q3
A. Money Supply
In July 2013, the central bank recorded money supply of M1 and M2 amounted for IDR 903.23 trillion and IDR 3,529.66 trillion respectively. To that end, M1 registered an increase of 17% (yoy) in July 2013, which is higher than 10.2% recorded in the previous month. Meanwhile, M2 increased by 15.5% in July 2013 which is higher than 11.9% (yoy) in June 2013.
High growth in money supply during Ramadhan and Eid Mubarak contributed to inflation in August 2013. Based on Bank Indonesia data, the population withdrew IDR 97 trillion during July 10- August 2, 2013 , which is 94.1% of IDR 103.1 trillion predicted as money required by the population during the Eid season.
Latest Economic Developments 2013:Q3
Indonesia’s current economy is at a critical point. The rupiah depreciation, the acceleration of inflation which poised the highest level since global financial crisis, coupled with rising current account deficit and the hemorrhage of international reserves attributable to capital outflow and huge short term external debt of private sector which has reached maturity have precipitated high instability of Indonesian macro economy. The Indonesian macroeconomic indicators have been deteriorating for more than a year. Besides, the high pressure of Indonesian economy is also attributable to the economic deterioration of emerging economies and an uncertain global economy. Hence, it is essential to put on alert that the aggravation of the condition may plunge the Indonesian economy into a crisis.
Postponement is not a Choice; Fuel Subsidies is growing “Time Bomb” that is Holding the Economy Hostage
Postponement is not a Choice; Fuel Subsidies is growing “Time Bomb” that is Holding the Economy Hostage
By : Dr. Rimawan Pradiptyo[1]
History Repeated
For the umpteenth time, during the reformation regime, Indonesia faces a dilemma which is associated with reducing fuel subsidies. Various road maps on how best to reduce fuel subsidies have been proposed since 2008, neither of which as it turned out, were a far cry from interests of politicians. Our collective memory is still fresh with government proposal to regulate and control the consumption of fuels in 2010, which was supposed to implemented in phases starting with Jakarta, and afterwards to cover the whole country by late 2013. However, apparently the plan failed to get off the ground due to the difficulty of acquiring requisite land for expanding storage fuel tanks that refuelling stations faced, which was compounded by the DPR rejection of research findings on the fuel policy and the best policy forward , by the team that comprised three Universities UGM-ITB-UI.