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Developments in Monetary Sector 2013Q2
A. Money Supply
In April 2013, the central bank registered an increase in the level of money supply, M1 and M2 of IDR 836.51 trillion and IDR 3,364.12 trillion. If compared to the same period in the previous year, the level of M1 and M2, showed an increase of 16% and 15% respectively.
The increase in money supply has a tendency of contributing to depreciation of Rupiah and an increase in general level of prices. The high growth in money supply contributes to high inflation as it induces a rise in demand which if not accompanied by growth in the real sector generates an increase in prices.
Latest Economic Developments 2013Q2
The Indonesia’s economy, which is measured by the amount of of Gross Domestic Product (GDP) at current prices registered growth from IDR 1,975.5 trillion in Q1 2012 to IDR 2,146.4 trillion in Q1 2013. Meanwhile, GDP at constant prices 2000 increased from Q1 2012 amounted for IDR 633.2 trillion to IDR 662.0 trillion in Q1 2013.
However, as predicted by GAMA LEI, the Indonesia’s economic growth in the Q1 2013 registered slight growth of just 6.02%, which was lower than 6.29% posted in the same period in 2012 and even lower than 6.1% in Q4 2012. This is the second time GAMA LEI has been able to predict precisely the signs of slower economic growth. On the contrary, predictions of the Indonesian government, pointed to signs of stonger economic growth. Moreover, Bank Indonesia had projected economic growth of 6.2% in the first quarter 2013 which was atrributable to strong investment and household consumption expenditure. Besides, GAMA LEI also succeeded to outperform predictions of the Asian Development Bank, which pointed to growth of 6.4 % of the Indonesian economy. The reality is that the Indonesia’s economy experienced lower growth in the Q1 2013 than predictions of economic analysts’experts, which is commensurate with results of GAMA LEI research that stressed the fact that the performance of the Indonesia’s economy in early 2013 would not be better than that posted in the previous year.
Indonesia Economy 2013: Toward the Year of ‘Politics’
By A. Tony Prasetiantono[1]
The year 2013 is a crucial one from the vantage point of political economy, because it sets the stage for next year, which will be a year of politics in which the conduct of elections for both the legislature and the President will be getting underway. In common parlance, such a year is often referred to as the year of living dangerously. However, I have the boldness to assure all, that there will not be economic and political uncertainty simply because of the general elections.