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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.
GAMA Leading Economic Indicator and Economic Outlook 2013:Q2
GAMA LEI has succeeded twice in predicting accurately and precisely potential signs of weakening performance of the Indonesian economy. GAMA LEI predicted economic growth decreased, which has been shown by lowering economic growth of 6.11% and 6.01% (YoY) in Q4 2012 and Q1 2013 respectively. GAMA LEI predictions were in stark contrast with those issued by most economic analysts who projected higher economic growth rate. In this edition, GAMA LEI predicts slow economic growth in Q2 2013.
Figure 19 : GAMA LEI Indonesia, 2000:Q1 – 2013:Q1