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Developments in Monetary Sector 2013Q1
A.Money Supply
In line with weakening economy growth in the domestic economy, money supply growth has become more sluggish. In December 2012, M2 growth decreased to 14.9% (YoY) compared with 16.4% (YoY), which was registered in December 2011. By the same token, MI growth also decreased to 16.4 %(YoY) in December 2012, smaller than 19.4% (YoY) in December 2011. The decrease in the growth of M2 and MI is attributable to the decrease in Rupiah demand deposits, caused by slower credit expansion as a result of weakening economic growth from 6.5% (2011) to 6.23% (2012).
Latest Economic Developments 2013Q1
The impact of sluggish economic growth in US and Europe has begun to bear on Indonesia, as reflected in the decrease in exports. Despite the fact that Indonesia succeeded in registering economic growth of 6.23 % YoY in 2012, making one of best performing economy in Asia after China, which recorded economic growth of 7.8% (YoY). However the achievement is tempered by the fact that 2012 growth figure is in fact lower than the assumption of 6.5% which was used in making National Budget (APBN) for 2012. Moreover, economic growth rate for 2012, is even lower compared to economic growth registered in 2011, which able to reach 6.5% (YoY). In 2012, the value of Indonesian Gross Domestic Product (GDP) in 2000 constant prices was IDR 2,618.1 trillion, which was an increase of IDR 153.4 trillion from IDR 2,464.7 trillion in 2011.
The Economic Crisis in Europe: Continues
By Prof. Dr. Sri Adiningsih, M.Sc. and Rosa Kristiadi M.Comm
European economic crisis which begun in 2010 shows no signs of abating. The ongoing economic crisis in the Eurozone region is attributable to the large public debt , which started to emerge in 2000, reflected in a significant increase in the ratio of government debt. In 2000, the ratio of government debt for Greece was just 77% of GDP, but in 2012 it had surged to 170%. IMF predicts that Greece debt ratio will rise above 180% in 2013, due to the widening budget deficit. Such a condition is very much in contrast to Maastricht Treaty rules that impose maximum limit of 60% on the country’s debt to GDP ratio and a deficit of 3 % of GDP. The theory is that economic uncertainty in the regional economy is unavoidable if the two ratios go beyond the maximum limits imposed