Country Report

Indonesia

February 2012
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Indonesia

1

Indonesia
Executive summary
3
Highlights

Outlook for 2012-16
4 6 9
Political outlook Economic policy outlook Economic forecast

Monthly review: February 2012
13 15 17
The political scene Economic policy Economic performance

Data and charts
19 20 21 23 24 25 26
Annual data and forecast Quarterly data Monthly data Annual trends charts Quarterly trends charts Monthly trends charts Comparative economic indicators

Country snapshot
27 28
Basic data Political structure

Editors: Editorial closing date: All queries: Next report:
Country Report February 2012

Nick Owen (editor); Fung Siu (consulting editor) January 31st 2012 Tel: (44.20) 7576 8000 E-mail: london@eiu.com To request the latest schedule, e-mail schedule@eiu.com
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com Tanjungpinang Singkawang Borneo Kalimantan Samarinda Balikpapan Palu Padang Sumatra PAPUA NEW GUINEA Manokwari Biak Sorong Obi Peleng Taliabu Seram Sea Seram Biak Siberut Jambi Sipura aipenuh Pagai Utara Sungaipenuh Pagai Selatan Pangkalpinang Belitung Sulawesi Amuntai Banjarmasin Wotu Kolaka Jayapura Fakfak Buru Palembang Bengkulu Java Sea umi Kotabumi Papua (Irian Jaya) Kendari Bulukumba Buton Ambon Banda Sea Kepulauan Aru Tanjungkarang Telukbetung Amamapare JAKARTA Majene Martapura Parepare Watampone Makassar INDIAN OCEAN I N Lombok D Flores Sea O Raba Flores N Alor E Wetar Semarang Kudus Turban Madura Surabaya Banyuwangi Bali S Savu Sea I TIMOR-LESTE Kupang Timor A Kepulauan Tanimbar Merauke Serang Cirebon Bandung Sukabumi Pekalongan Java Cilacap Yogyakarta Surakarta Madiun Kediri Malang 1.2 MYANMAR Main railway Main road International boundary Main airport Capital LAOS THAILAND PHILIPPINES CAMBODIA VIETNAM Country Report February 2012 Major town Other town South China Sea Sulu Sea Andaman Sea Banda Aceh Aceh Medan MALAYSIA BRUNEI Natuna Besar SINGAPORE MALAYSIA Tarakan Tanjungredeb Manado Gorontalo Ternate Gor Palau Halmahera Molucca Sea Sangir Palau Morotai PACIFIC OCEAN Tebigtinggi Pematangsiantar Celebes Sea Simeulue Str ait of M Kepulauan Talaud Nias ala cc a Pekanbaru Sangkulirang Pontianak Bangka www.eiu.000 Mataram Denpasar Sumbawa Jember Sumba Lumajang Arafura Sea 0 km 250 500 750 Timor Sea 0 miles 250 500 © The Economist Intelligence Unit Limited 2012 © The Economist Intelligence Unit Limited 2012 AUSTRALIA Indonesia .

Officials expect an extension of tax incentives to lead to a 15% rise in inward investment in 2012. • The Economist Intelligence Unit forecasts that real GDP growth will slow to 5. has been damaged further by the trial for corruption of its previous treasurer. Jakarta. The country's highest monthly minimum wage. • After leaving its main interest rate at a record low level of 6% in January. according to Statistics Indonesia (BPS). the central bank) will cut rates in the first half of 2012. Prices were up by 5. while seeking to manage volatile flows of foreign capital.2% by 2016. in the capital. driven mainly by an improvement in private consumption and fixed investment.5% a year in 2013-16. but the central bank later announced a de facto loosening of monetary policy by widening the lower limit of its overnight deposit rate. • Consumer prices rose by 3. Monthly review • The reputation of the Democratic Party (PD).2% on average in 2012.Indonesia 3 Executive summary Highlights February 2012 Outlook for 2012-16 • It is too soon to write off the remaining three years of his presidency.eiu. at a record low of 6% in January. • The fiscal deficit will widen to the equivalent of 1.4% of GDP on average in 2012-13. is to increase by 18. • A requirement of the election law means that the next president is most likely to be the nominee of one of the country's three main political parties. minimum wages will rise by 9.4% on average in 2011. • Violence has escalated in Aceh province ahead of local elections scheduled for April 9th.7% of GDP in the forecast period.9% in 2012. • We expect the current account to record an average surplus equivalent to 0. Country Report February 2012 www. before accelerating to an average of 6. The income account will remain in deficit owing to the repatriation of earnings by foreign-owned companies. which heads the ruling coalition. Muhammad Nazaruddin.5% to Rp1. the slowest pace of growth since March 2010. but there are already signs that Susilo Bambang Yudhoyono is becoming a lame duck ahead of the presidential election in 2014.3trn (US$20bn) in 2011.5m (around US$170). reaching 0.8% year on year in December. but it will then narrow steadily. • According to the Ministry of Manpower and Transmigration. according to the Investment Co-ordinating Board (BKPM). but it is possible that the candidate of one of the smaller parties will secure the post. • Foreign direct investment increased by 18% to Rp175. • BI left its main interest rate.com © The Economist Intelligence Unit Limited 2012 . Bank Indonesia (BI. The spate of killings has raised concern over the state of a 2005 peace agreement between the government and separatist rebels. the BI rate.

with various member parties routinely voting against the president on reform issues. to discredit leading reformers in the government. the chairman of the Golkar party and one of the country’s richest pribumi (ethnic-Indonesian) businessmen. In an attempt to preserve the unity of the coalition. the president. there are already signs that Mr Yudhoyono is becoming a lame duck ahead of elections in 2014. Mr Yudhoyono’s coalition controls about two-thirds of the seats in the DPR. The president chose to retain ministers tainted by allegations of corruption. the legislature). Boediono. Golkar called for the resignation of the finance minister. Mr Yudhoyono failed to support Ms Mulyani—his most respected minister—as she challenged the influence of vested interests. In January last year Golkar attempted to use the case of Gayus Tambunan. There have since been other occasions of coalition in-fighting. after he prevented a consortium led by Mr Bakrie’s family from becoming the controlling shareholder in a copper and gold mine on Sumbawa island. Conservatives within the coalition seem to have succeeded in facing down reformists in the power struggles that characterised the early part of Mr Yudhoyono’s second term. in May 2011 allegations of bribery led to the dismissal of the party's treasurer. when he reshuffled his cabinet. notably the vice-president. The scandal surrounding Mr Nazaruddin has reinforced the impression that Mr Yudhoyono is a weak leader who lacks the authority to maintain discipline within his own party. Susilo Bambang Yudhoyono. let alone within the governing six-party coalition in the House of People's Representatives (DPR. Although it is too soon to write off the remaining three years of his final term as president. in December Mr Yudhoyono chose not to renew the mandate of a presidential Country Report February 2012 www. Reformers will remain vulnerable to Golkar-led attacks. he has since lost some of that support. but it has proved even less effective than the one that he led during his first term. but he demoted one of the government's leading reformers.com © The Economist Intelligence Unit Limited 2012 .4 Indonesia Outlook for 2012-16 Political outlook Political stability After successfully guiding Indonesia through the 2008-09 global financial crisis. accusing other senior PD members of corruption. when Sri Mulyani Indrawati resigned as finance minister to become a managing director at the World Bank after a series of high-profile disagreements with Aburizal Bakrie. a former tax official convicted of bribery. who has since become a whistleblower. by transferring her from the Ministry of Trade to the Ministry of Tourism. Although the president himself has not been implicated in the scandal. In the latest setback for reformers. Muhammad Nazaruddin. Then. However. The reason for Ms Pangestu’s demotion appears to have been her success in freeing up Indonesia’s trade. Mr Yudhoyono missed an opportunity to revive his presidency in October 2011. in May. Agus Martowardojo. Mr Yudhoyono's promises to clean up politics have started to sound hollow amid a corruption scandal besetting his own Democratic Party (PD).eiu. showed that he had retained the backing of voters by winning a second term in the July 2009 election. The turning point came in May 2010. Mari Pangestu.

Should Ms Mulyani choose to run. Golkar has already agreed to nominate Mr Bakrie as its presidential candidate. Although the DPR is expected to relax the rules before 2014. Rumours that Ms Mulyani is considering a presidential run were stoked in August 2011. including the suicide bombing in September of a Protestant church in Surakarta. separatist tensions continue to simmer in the far-eastern province of Papua. Megawati Soekarnoputri. only political parties (or groups of parties) that win at least 20% of parliamentary seats or 25% of the vote in the legislative election are eligible to nominate presidential candidates. but the risk of al-Qaida-inspired attacks cannot be discounted altogether. the United People's Party (SRI. The first major attack in almost four years.com © The Economist Intelligence Unit Limited 2012 . has raised concerns that democracy could be undermined by the emergence of political dynasties. This. Golkar and the Indonesian Democratic Party-Struggle (PDI-P). Ani Bambang Yudhoyono. she would represent the best hope for reform. Parliamentary elections will also be held in that year and will have a bearing on the outcome of the presidential poll. and they may have decided to direct their attacks towards local targets rather than foreigners. together with the marriage in November 2011 of one of Mr Yudhoyono’s sons to a daughter of Hatta Rajasa. Indonesia's 13-year-old democracy should not be taken for granted. at the JW Marriott and Ritz-Carlton hotels in the capital.eiu. the terrorist threat will remain severe. There is a risk of figures with links to Soeharto (the dictator who ruled Indonesia during Country Report February 2012 www. the next president is still likely to be the nominee of one of the country’s three main parties—the PD. despite the fact that she lost to Mr Yudhoyono in both the 2004 and the 2009 elections. said that they planned to nominate her as their candidate. the chairman of the National Mandate Party (PAN). killed nine people. Central Java. Meanwhile. Violence in Indonesia’s Aceh province declined after the government signed a peace accord with the separatist Free Aceh Movement (GAM) in 2005. Violence is also increasing against Muslim minorities. The PDI-P is again expected to nominate its own leader. The small cells responsible for these attacks lack the expertise of those groups responsible for the earlier large-scale bombings. when the founders of a new political party. Jakarta. but there has been an upsurge in killings ahead of local elections scheduled for April 9th. when eight people were killed in clashes between Christians and Muslims in Maluku province. Most importantly for foreign investors. According to the 2009 presidential election law. Indonesia suffered a series of large-scale bombings in 2002-05 that specifically targeted foreigners. better known as Partai Sri on account of its Indonesian initials). but it remains to be seen whether her popularity extends to ordinary voters as well as foreign investors.Indonesia 5 task-force established to investigate graft within the police and the attorneygeneral’s office. Election watch Indonesia will elect a new president to succeed Mr Yudhoyono in 2014. in July 2009. Speculation has increased that the PD may nominate Mr Yudhoyono’s wife. The risk of a repeat of the communal violence that swept across Indonesia's eastern isles in the late 1990s and early 2000s was underscored in September 2011. the previous president. In 2011 there were a series of smallscale attacks.

including reform of Indonesia’s labour laws and the ending of energy subsidies. it is possible that more restrictions will be imposed on short-term capital flows. As the world’s advanced economies are set to grow relatively slowly in 2012-16. Barack Obama. Prabowo Subianto. and the authorities are concerned that a sudden swing in sentiment could lead to large-scale capital flight.eiu. International relations Indonesia has become more prominent in international organisations in recent years. the commander of the military at the time of East Timor’s bloody secession in the late 1990s. Indonesia has achieved stable GDP growth of 5-6% a year. amid volatile flows of foreign capital will remain a priority for the authorities. The anti-corruption drive will continue. however. but legislation aimed at addressing the shortcomings of the country’s business environment and moving the economy onto a faster growth path will move forward in a stop-start manner. Country Report February 2012 www. There will be intermittent disputes with Malaysia and Singapore over a range of long-standing issues. Indonesia will rely increasingly on China as an export market. Several changes. In 2009-11 Indonesia attracted around US$30bn of short-term foreign investment. approved legislation aimed at making it easier for the state to acquire land for development purposes. Economic policy outlook Policy trends Since recovering from the 1997-98 Asian financial crisis. It should remove one of the major obstacles to a number of much-needed infrastructure projects. Tommy Soeharto. may not prove politically feasible. but the Anti-Corruption Commission (KPK) will face constant opposition. who commanded the special forces (Kopassus) in East Timor and is now a leading member of the Great Indonesia Movement Party (Gerindra). along with Soeharto's son-in-law. as occurred during the 1997-98 Asian financial crisis. serving as a non-permanent member of the UN Security Council in 2006-08. These include Wiranto. approved in December 2011. the rupiah. spent several years in Indonesia as a child and that he recently declared a wish to strengthen US engagement with Asia. Indonesia’s foreign policy will continue to be influenced by the principle of non-alignment. Maintaining the stability of the local currency. is considering a run for the presidency. reflecting the conflicting views on reform. as demonstrated by the backlash among local manufacturers against a free-trade agreement between China and the Association of South-East Asian Nations (ASEAN) that came fully into effect in 2010. The DPR has.6 Indonesia 1967-98) running for the presidency in 2014. sets clear rules for resolving disputes and agreeing compensation. being elected to the UN Human Rights Council and taking a seat at meetings of the G20 group of the world’s major economies. and the government will resist becoming too closely associated with either the US or China. There is an opportunity for warmer relations with the US. Although officials remain eager to attract foreign direct investment. given that the president of that country.com © The Economist Intelligence Unit Limited 2012 . The law. Ties with China are also likely to mature. But there will be opposition to closer economic ties with China. who now heads the People's Conscience Party (Hanura). There have even been reports that Soeharto's youngest son.

from an estimated Rp237. the Indonesian government generally fails to operate an effective countercyclical fiscal policy. Despite the fact that fuel subsidies mainly benefit Indonesia’s middle class.2% of GDP by 2016. equivalent to 1. meaning that the subsidy bill may miss the official target unless the government takes the politically sensitive decision to raise the retail price of fuel products. equivalent to 20% of government revenue and 18% of expenditure by the central and Country Report February 2012 www. A healthy rate of economic growth should cause government debt to fall relative to GDP. effective and well-targeted". Volatile global oil prices will remain a source of fiscal uncertainty.Indonesia 7 Fiscal policy As a consequence of the inability of the civil service to spend fully the funds allocated to it.9trn. However. However. civil servants tend to be excessively cautious when signing off big-ticket items of capital expenditure. Presenting the 2012 budget to the House of People’s Representatives (DPR. Amid government anti-corruption efforts. is not ready to implement the president’s preferred policy of rationing petrol consumption. It is therefore no surprise that the current president. the president said that fuel subsidies were not reaching the country's poorest people. it looks increasingly likely that the government will try to raise prices after all.eiu. This could mean that an international credit-rating agency.2trn in 2011. In focus: Fuel subsidies Indonesia's politicians raise petrol prices at their peril. Standard & Poor's. has wanted to avoid any increase in fuel prices this year. Fitch Ratings and Moody's. given that the state-owned oil company. According to the 2012 budget. it was the decision by Soeharto (the dictator who ruled Indonesia during 1967-98) to increase the price of petrol and other fuel products that triggered the large-scale protests that. and announced plans to make them more "efficient. Indeed. expenditure will rise by 8. We forecast that the deficit will then decline steadily.6% to Rp1. which was approved by the DPR in October 2011. the legislature) in August 2011. following the examples set in December and January by two other such firms. but underspending will remain a problem. Susilo Bambang Yudhoyono. There is a clear case for removing fuel subsidies and raising petrol prices. healthcare and other basic services for all Indonesians. According to official budget estimates. car-owning middle class—the largest consumers of subsidised fuel. we believe that the global oil price will only fall as far as US$100/b in 2012. Critics say that the billions of US dollars spent each year by the government to keep petrol prices low could be better spent improving education. diesel and other fuel products to rise and fall in line with market trends.com © The Economist Intelligence Unit Limited 2012 . Fuel subsidies mainly benefit Indonesia’s relatively rich.5% of GDP (based on the official forecast for nominal GDP). to 0. subsidies cost Rp237. thus enabling the government to borrow from international markets more cheaply. elevates Indonesian sovereign debt to investment grade. Pertamina. officials have baulked at proposals to allow prices for petrol. The Economist Intelligence Unit expects a fiscal deficit equivalent to 1.4% of GDP in 2012.435trn (US$160bn). In 2012 the government is hoping that a fall in the global oil price (dated Brent Blend) to US$90/barrel will allow the cost of subsidies to drop to Rp208.2trn (US$27bn) in 2011. Mr Yudhoyono seems to agree. in turn. led to the collapse of his 32-year rule.

it is impossible to know what the impact of any price rise would be. on January 12th. On a year-on-year basis the rate of inflation accelerated to around 18% in that month. The move underscored the authorities’ concerns about the worsening outlook for global economic growth. Faced with the prospect of a spiralling subsidy bill. In January the deputy energy minister.) In 2012 the government aims to cut the cost of subsidies by 12% to Rp208.5%. Fuel subsidies alone cost an estimated Rp129. Furthermore. after surprising observers by cutting the main interest rate.5%.8 Indonesia regional governments combined. the government had planned to end sales of subsidised petrol to owners of private cars on Java and Bali from April 1st.500/litre).000 (US$1) per litre—double the price of subsidised Premium petrol (Rp4. Without any details. Although the central bank made no change to the BI rate in January. consumer prices spiked by 8. the BI rate. the last time that Indonesia raised petrol prices. it loosened monetary policy by widening the lower limit of the rate that it pays on overnight deposits by 50 basis points.5-5. at Rp165trn. This also means that subsidies would cost more than planned.9trn. consumer prices would have come under upward pressure if the government had been able to implement its original plan of restricting sales of subsidised petrol. the government now looks set to postpone its plan to restrict consumption. Nevertheless. the central bank) to lower interest rates again in the first half of 2012. However. In October 2005. by a total of 75 basis points in October and November to a record low level of 6%. which sells for around Rp9. however. Riots erupted on both occasions. said that the government is considering raising the price of a litre of Premium petrol by Rp500-2. It is unclear whether legislators would approve a price rise: it would almost certainly lead to widespread protests (although not on the same scale as those in 1998) and a sharp rise in the price of goods and services.7% month on month. Of course. (The actual cost of fuel subsidies last year is widely reported to have been even higher. BI’s governors left interest rates on hold at their most recent meeting. Monetary policy Given that inflation remains at the lower end of the official target range of 3. possibly pushing inflation above the official target range of 3. Motorists would have had to pay the full market price for high-octane petrol. representing an increase of 11-44%. diesel and kerosene prices in May 2008 sent inflation soaring to around 12% year on year. it looks increasingly likely that the government will miss these targets— mainly because they rest on the assumption that domestic consumption of subsidised fuel can be restricted to only 40m kilolitres.7trn.000.com © The Economist Intelligence Unit Limited 2012 . making it all but certain that consumption would exceed the authorities’ target. In an attempt to curb consumption. Indonesia is likely to be one of the world's economies that is least affected by any slowdown in global growth.eiu. and spending on fuel subsidies is expected to fall to Rp123.5-5.6trn. Widjajono Partowidagdo. a petrol price rise for all motorists is likely to have a much larger impact on consumer prices. known locally as Pertamax. an increase in gas. Mr Yudhoyono’s administration is now proposing to raise the price of subsidised fuel—something that it had previously ruled out. owing to its relatively Country Report February 2012 www. there may be scope for Bank Indonesia (BI. Such a move would require the assent of the DPR. Following complaints from Pertamina that it would not be able to meet motorists’ demand for Pertamax.

In addition.1 8.6 2014 2.3 0.8 0. Interest rates will rise more sharply in 2013-14 before stabilising in 2015-16. Fixed investment will grow by 8. For the same reason Indonesia should cope better than most of its neighbours with the expected slowdown in global growth in 2012.2 2.2 1.5% in 2013 and will continue to grow at around this pace in 2014-16. There are a number of downside risks to our forecast.4 2015 2.39 1.0 100. Economic forecast International assumptions 2011 2012 Economic growth (%) US GDP 1.4 -12.976 1.5% in 2011.1 2.2 0.3 1.2 1.1% in 2012-16.2 0.1 OECD CPI 2. %) 0. Growth in imports of goods and services will be slightly faster.24 1.3 -0.0 81.3 108. at 8.6% a year. interest rates will remain more or less stable in 2012.2 1.770 8.24 2.2 Manufactures (measured in US$) 6.3 2.4 0.3 2.6 2.6 4. Private consumption will remain a major engine of economic growth.2 1. We estimate that exports of goods and services grew at double-digit rates for the second year in a row in 2011.0 Exchange rate: Rp:US$ (av) 8.0 Non-oil commodities (measured in US$) 26.5 2016 2.27 2013 1. %) 0.9 103. The most serious is that the weak recovery in the US stalls and the euro-zone crisis intensifies.7 1.6 2. US$/b) 111. largely because exports account for a relatively small proportion of its GDP.698 1.803 1. although we still expect Indonesia's real GDP growth to slow.1 Exchange rate: ¥:US$ (av) 79.8 2.9%.0 World trade 6.7 6.0 Oil (Brent.2 2.9 World GDP 2. sending the global economy back into recession.7 2. supported by stronger domestic demand and increased inflows of foreign investment.4 2.23 2.3 2.0 -2.5 83. largely owing to healthy Chinese demand for Indonesia’s commodities.8 1.0 6.3 3.3 82. expanding by 5.0 2. Exports will expand at an average annual rate of 8.959 1. the loose monetary policy stance adopted by Western central banks has led to strong flows of capital into Country Report February 2012 www.958 Exchange rate: US$:€ (av) 1. with more interest rate cuts early in the year followed by rises later on in the period.26 Economic growth Indonesia was affected less severely by the 2008-09 global financial crisis than many neighbouring economies.8 OECD GDP 1.9 110.8 104. On an annual average basis. to 5.8 Inflation indicators (% unless otherwise indicated) US CPI 3.6 77.2 ¥ 3-month money market rate (av.7% a year.2 2.com © The Economist Intelligence Unit Limited 2012 .2 80.0 8.8 0.0 8.2 2.8 2.0 1.1 2.2% a year on average in 2012-16. but the pace of real GDP growth is still expected to slow this year.2 2. The economy will then expand by 6.9 Financial variables US$ 3-month commercial paper rate (av. but growth will slow in 2012. from an estimated 6.9 -1.eiu.9 6.0 8.Indonesia 9 small export-oriented manufacturing sector.2 3.0 6.9 1. The authorities will also put pressure on the commercial banking sector to respond to looser monetary conditions by lowering their own lending rates.

The rupiah will remain vulnerable to sudden swings in sentiment.2 9. Speculation has increased that the government will have no alternative but to raise fuel prices. but the currency is likely to be supported by a wide differential between local interest rates and those in advanced economies. the rupiah will appreciate by 1. however. taking its cumulative appreciation since 2009 to 18.8 8. price growth slowed throughout the year.0 8.0 6.5 3. such as improvements to infrastructure. creating concerns that asset-price bubbles could develop there.0 9. at 5.5 8. at least until 2013.2 9. However.com © The Economist Intelligence Unit Limited 2012 Exchange rates Country Report February 2012 .5 9.7 9.5 4. On an annual average basis. But pump-station owners have complained that they are not ready to implement the change.2 2013 b 6.8 8.1% in 2012 and 0.0 7.9 6.1 9.8 4.2%.6 2016 b 6.7 3.2 8.5 4. The government had ruled out any increase in prices this year.8 9.4 13.1% a year in 2013-16.5 5.0 a Economist Intelligence Unit estimates.6 8. Weaker economic growth and a decline in prices for most commodities other than rice will damp down price pressures.8 4. The bursting of bubbles can trigger a deleveraging process that hurts a country’s real economy. The rupiah appreciated by 3.6 5.8 14.5 5.8% year on year in December.0 8.2 7. Economic growth % GDP c Private consumption Government consumption Gross fixed investment Exports of goods & services Imports of goods & services Domestic demand Agriculture Industry Services statistical discrepancy. Inflation will then average 6.0 8. b Economist Intelligence Unit forecasts.8 2012 b 5. c Includes Inflation Although the rate of inflation accelerated to 5.4% on an annual average basis in 2011.0 6. Indonesia's relatively rapid GDP growth and its current-account surplus will boost the local currency. The local currency has been supported by relatively rapid GDP growth and interest from foreign investors in carry trades (whereby speculators borrow in countries where interest rates are low.8 3.3 6.7 4.3 5.7 9. proposing instead to reduce the cost of subsidies by ending sales of subsidised petrol to owners of private cars on Java and Bali from April 1st.6 6. and a period of lending growth could benefit the economy if funds are invested in productive areas.4 9.1 2015 b 6.3 8. Indonesian consumers and businesses are not highly leveraged.4 3.5 7.4 7. ending the year at 6%.9 4.5%.10 Indonesia Indonesia.6% against the US dollar on an annual average basis in 2011. such as Indonesia).7 3. Such a move could lead to sharply higher inflation. The primary risk to our forecast comes from the possibility that high global oil prices could force officials to raise domestic fuel prices to restrain the budget deficit.5 4.6 8. www. inflation will be lower. such as the US and Japan. This year the trend will be reversed.eiu. to purchase assets in countries with higher rates.5 5. But the exchange rate has been volatile: the rupiah depreciated by almost 7% in August-December 2011 as investors responded to the sovereign debt crisis in the euro zone by selling off Indonesian assets.3 5.3 8.1% a year in 2014-16.3 7. 2011 a 6.6 6.6 4. with consumer prices rising by only 3.2 2014 b 6. Thereafter. After depreciating by 2.2% in 2013.4 3.3 5. with inflation rising steadily.

3 6.1 6.2 6.646 11.3 -0.7 5.4 -1.9 370.2 1.630 11.8 11.6 -0. Oil exports will decline in volume terms. US$ bn) Exchange rate Rp:US$ (av) Exchange rate Rp:US$ (end-period) Exchange rate Rp:¥100 (av) Exchange rate Rp:€ (end-period) 2011 a 2012 b 2013 b 2014 b 2015 b 2016 b 6.2 0.4 4.647 c 11.770 c 8.8 6.9 145.4 -1.5 3.3 174.1 0.7 -1.968 8.881 8.022 c 11.958 8. Country Report February 2012 www. from US$30. b Economist Intelligence Unit forecasts.6 c 6.6 153.6 158.4 c 5.5 6. Although a slowdown in the global economy will cause export growth to decelerate in 2012.6 0. we expect the surplus to continue to rise throughout the forecast period.3 4. leading to a rise in inward remittances and support for the transfers account.030 11.5 5.3 3.064 10.7 6.2 231.7 0.7 6. boosted by strong exports of commodities to China.483 11.1 9.2 202.6 3.698 8.7% of GDP on average in 2012-16.4 213.884 a Economist Intelligence Unit estimates.9 243.803 8.8 311.976 8.3 145.959 8. owing to stagnant production at Indonesia’s ageing oilfields and increasing domestic demand for petroleum products.6bn in 2010. Limited employment opportunities at home will force more Indonesian workers to seek jobs abroad.2 -1.2 6.2 8.2 4.3 7. Forecast summary (% unless otherwise indicated) Real GDP growth Industrial production growth Gross agricultural production growth Unemployment rate (av) Consumer price inflation (av) Consumer price inflation (end-period) Money market interest rate Government balance (% of GDP) Exports of goods fob (US$ bn) Imports of goods fob (US$ bn) Current-account balance (US$ bn) Current-account balance (% of GDP) External debt (end-period.012 10. We expect the current account to record a surplus equivalent to 0.9 6.8 c 6.1bn by 2016.4 148. The deficit on the income account will widen as foreigners continue to repatriate earnings while Indonesian investments abroad still earn relatively low returns.6 6.5 199.3 3.207 11.eiu.0 6. at least in the early part of the forecast period.0 4.2 146.3 164.9 5.0 5.5 324.7 3.0 268.864 c 8.982 10.5 6.4 6.751 8.5 6.2 6.8 5.739 10.Indonesia 11 External sector Indonesia's merchandise trade surplus rose to an estimated US$38.3 5.com © The Economist Intelligence Unit Limited 2012 .8 0.5 5.892 8. c Actual.4 6.8 5.1 5.7 6.3 281.1bn in 2011.2 9.8 3.2 5.0 5.8 0. reaching US$59.071 11.3 3.

av) Money market rate 1.1 7.2 3 Qtr 1.7 2. quarter on quarter % change.905 5.6 18.2 1.600 8. quarter on quarter % change.6 9.5 0.1 6.6 1.4 11.6 3.3 8.1 1.5 1.9 1.5 4.5 6.922 6.0 3.3 -0.4 0.8 7.6 1.5 5.5 3.4 8.2 9.0 0.7 1.4 3.1 1.3 3. year on year Imports of goods & services % change.9 5.2 7.1 6.7 6.1 7.2 7.4 4.9 2.4 4 Qtr 1.8 7.1 8.8 6.1 3.3 1.3 2.2 7.039 9.0 6.068 5.6 3. quarter on quarter % change.2 1.1 12.9 1.6 1.6 7.3 2012 1 Qtr 1.3 6.9 1.9 5.2 2.8 7.0 1.7 8.5 1.584 8.4 5.4 8.000 9.8 1.7 1.057 9.1 1.8 1.1 10.9 10.887 5.3 3.6 1.7 6.5 5.7 0.9 10.4 4.4 6.976 6. quarter on quarter % change.7 2.9 2.4 1.9 8.8 10.com © The Economist Intelligence Unit Limited 2012 .2 1.7 8.0 2.4 5.3 8.2 6.6 7.4 0.7 6.6 2013 1 Qtr 1.4 -6.6 9.8 8.2 2.1 5.9 6.8 5.5 3.8 4.7 1.6 2. quarter on quarter % change.3 5.5 2. quarter on quarter % change.896 8.2 6.3 5.1 1.5 1.3 8.0 2. year on year Exchange rate Rp:US$ Average End-period Interest rates (%.5 0.5 6. year on year Consumer prices % change.020 5.6 8.012 5.6 1.4 1.878 8.7 4 Qtr 1.4 4.9 0.2 1.597 6.8 4.1 Country Report February 2012 www.7 2.9 6.2 2.0 6.7 1.2 2 Qtr 1.8 0. year on year Gross fixed investment % change.3 4.1 1.2 5.1 4 Qtr 2. quarter on quarter % change.9 6.eiu.0 5.7 5.3 4.7 6.4 0.6 3.1 1.8 2.8 6.8 4.4 4.003 8.931 8.6 15.8 5.1 9.5 5. year on year Producer prices % change.2 5.030 6. year on year Private consumption % change.5 1.9 9.7 6.8 1.4 5.1 1.5 0.7 9.1 1.958 5.8 9.2 6. year on year Domestic demand % change.3 5.4 15.3 2.8 4.8 6.897 8.5 14.9 1.4 7.8 5.8 2.3 4.9 1.9 9.4 5.1 1.7 5.2 1.1 8.4 2.5 7.8 1.6 1.9 7.8 -1.5 6.9 2 Qtr 1.5 5.0 1.2 8.2 8.3 4.8 2.6 0.6 1.4 5.6 0.985 9.9 4.0 3 Qtr 1.4 13.0 2 Qtr 1.0 3 Qtr 1.823 5.949 8.8 1.9 0. quarter on quarter % change. quarter on quarter % change.8 2.0 7.3 6.6 1. year on year Government consumption % change. year on year Exports of goods & services % change.6 1.1 2.5 6.4 9.5 1.4 5.4 0.3 4.5 0.2 8.9 1.1 0.12 Indonesia Quarterly forecasts 2011 1 Qtr GDP % change.3 3.709 6.6 8.8 17.4 6.8 6.6 5.

against 42% who believed that his administration was unable or unwilling to enforce the law. the PD chairman. and Mirwan Amir. who serves as the party’s chief patron and is its dominant political personality. Mr Nazaruddin has also alleged that Mr Urbaningrum spent Rp50bn to purchase votes that secured his chairmanship of the party in 2010. www. which heads the governing coalition. Another witness. has alleged that Andi Mallarangeng. leaving the party facing a decline in support at the 2014 legislative polls. Muhammad Nazaruddin. which was awarded the contract to build a sports complex in Bogor. South Sumatra. with only 33% of respondents trusting Mr Yudhoyono's cabinet on this core duty of the state. the legislature). in December 2011 found that public confidence in anti-corruption measures instigated by his administration had reached a record low. a local pollster. setting the stage for a protracted period of negative publicity for the party and its leadership. obtaining the funds in bribes from a state-owned construction company. which is the largest in the DPR. rose to prominence in the 2004 election on a campaign platform that included a strong commitment to good governance and anti-corruption measures.7bn (US$520. a deputy chairman of the budget committee in the House of People's Representatives (DPR. Public support on the important issue of law enforcement had also plunged. accepted a share of the funds embezzled from the contract. The party. The public is losing confidence in law enforcement Allegations of corruption within the PD’s leadership also reflect badly on the president. Mindo Rosalina Manulang. West Java. The exposure of its leading public figures to corruption allegations will repel many of its natural supporters. Mr Nazaruddin allegedly received a bribe of Rp4. Mr Nazaruddin has testified that Anas Urbaningrum. His allegations therefore draw in much of the PD’s next generation of leaders.com © The Economist Intelligence Unit Limited 2012 Country Report February 2012 .Indonesia 13 Monthly review: February 2012 The political scene The president’s party faces more corruption allegations Allegations of corruption across the top ranks of the Democratic Party (PD). have inflicted considerable damage on the party’s reputation. Duta Graha Indah. and they may now lead to a politically charged investigation by the Anti-Corruption Commission (KPK). which the city hosted in November 2011. Susilo Bambang Yudhoyono. The allegations have been set out during the trial of the party’s previous treasurer. Although Mr Yudhoyono himself faces no allegations of corruption.000) in exchange for ensuring that the contract was awarded to a local construction firm. who has been charged with graft in relation to the construction of an athletes’ village in Palembang. The KPK has said that it may widen its investigation on the basis of Mr Nazaruddin’s allegations. orchestrated the rigging of the tender. with only 44% of respondents viewing the cabinet's performance on this issue positively. the sports and youth affairs minister. down from a high of 77% in December 2008 and 52% in December 2010. Adhi Karya.eiu. This is the first time that a majority of negative responses has been collected on this issue since Mr Yudhoyono took office in 2004. for the Southeast Asian Games. a survey conducted by the Indonesian Survey Institute (LSI).

Aceh is scheduled to elect a governor on April 9th. Among the most prominent were the murder of three followers of the Ahmadiyah sect of Islam by a vigilante mob. in addition to officials in 16 districts and municipalities. the Setara Institute said that poor law enforcement lay at the heart of the problem. South Sulawesi. The home affairs minister. Indramayu and Bandung. described the attack as anarchic and said that he would take action against the perpetrators. His trial. reflecting the same upwards trend. leading to the repeal of by-laws in Tangerang. the Wahid Institute. The Wahid Institute reported that 36 regulations had been introduced last year that imposed aspects of Islamic doctrine. In a statement. up from 200 in 2010. petty criminals face the full force of the law and worse. reported slightly different figures. The boy was eventually found guilty but was set free immediately. and in January it forced local authorities to repeal a ban on the sale of alcoholic drinks. including banning the sale and consumption of alcohol. heightening concerns over security in the country’s far-western province. and also highlighted the steady growth of discriminatory religious by-laws. regulating female attire and behaviour. is planning to stand for Country Report February 2012 www. but were twice postponed pending clarification of rules concerning the eligibility of independent candidates for the governorship. Violence rises in Aceh ahead of local elections Violence has escalated in Aceh ahead of local elections. In response. Meanwhile. In recent weeks attention has focused on a 15-year-old boy who has not been named from Palu.com © The Economist Intelligence Unit Limited 2012 . It recorded 276 incidents of violence and religious intolerance in 2011. including the Islamic Defenders Front (FPI) and the Islamic Peoples Forum (FUI). Although cases of grand corruption pass unresolved. attacked the ministry’s premises in Jakarta.eiu. which concluded in January. up from 198 in 2010. Gamawan Fauzi.14 Indonesia The unequal treatment of rich and poor in the criminal justice system is a major factor contributing to this damning verdict. the sealing of the GKI Yasmin Protestant church by municipal authorities in Bogor. The incumbent governor. Religious intolerance is spreading Two respected local think-tanks have warned that religious intolerance is on the rise. the other think-tank. all in West Java. East Java. Of greater concern was the case of two brothers who died in police custody in West Sumatra after being arrested for petty crimes in December. The National Commission on Human Rights (Komnas HAM) said in late January that the brothers had been tortured to death by the police. hardline Islamic vigilante groups. The greatest number of discriminatory by-laws was introduced in West Java. who faced a five-year prison sentence for stealing a pair of flip-flop sandals from a police officer. The polls were initially scheduled to take place in November 2011. sparked a national campaign that led to thousands of pairs of sandals being dumped at police stations across the country. The Ministry of Home Affairs has an ongoing process to review by-laws that contradict national legislation. and mandatory observance of certain Islamic practices. which was wracked by a separatist war until 2005. In late December 2011 the Setara Institute for Democracy and Peace said that it had recorded 244 violations of religious rights in 2011. Irwandi Yusuf. It warned that in many cases the authorities were actively involved in many of the violations. and a mob attack against the homes of Shia Muslims in Madura.

However. Seven migrant workers. The move should encourage banks to increase their loans to the real economy. the central bank) held its main interest rate.000 (US$93).3-6. The central bank’s board of governors said that it believed that the BI rate—which was reduced to the present record-low level by a cumulative 75basis-point reduction in October and November—remained consistent with its targets for growth and inflation.Indonesia 15 re-election on an independent platform. will rise by 9.4% on average in the first 11 months of the year. The recent violence has underscored the fragility of a 2005 peace agreement signed by the government and the separatist Free Aceh Movement (GAM). mostly from the main island of Java. Zaini Abdullah. According to the Ministry of Manpower and Transmigration. the BI rate. in Gorontalo province. rather than simply placing their deposits in low-yielding accounts at the central bank. A factfinding team dispatched by the DPR to the province concluded that much of the violence was politically motivated. Credit extended by Indonesia’s commercial banks grew rapidly last year. with claims on the private sector rising by 26.000 lives. The agreement ended a 29-year civil war in Aceh that claimed 15. Yet despite the increase in wages. in line with a fall in global commodity prices. provincial minimum wages will rise by 9. steady at 6% for the second month in a row at its latest monthly meeting on January 12th.4-6.com © The Economist Intelligence Unit Limited 2012 . Jakarta. were shot dead in separate incidents in December.8% year on year in October and by 24. The stand-off between Mr Yusuf and Mr Abdullah has heightened tensions between rival sets of supporters. but that decision was challenged by Mr Yusuf’s main rival in the governor poll. As of November 2011 average lending rates for consumer credit stood at 14. on the island of Sulawesi. However. according to IMF figures. while it aims to restrict consumer price inflation in those two years to a range of 3. BI announced a de facto loosening of monetary policy when it said that it would widen the lower limit of its overnight deposit rate by 50 basis points to 200 basis points below the BI rate. five days later.5m (US$170) in 2012.5% to Rp1. Economic policy Bank Indonesia leaves interest rates on hold Bank Indonesia (BI. The Constitutional Court ruled in 2010 that independents should be allowed to stand for election. and in early January the home of a politician standing for election as a district chief was fire-bombed. working capital credit at 12. The central bank is also calling on the country’s commercial lenders to reduce their own lending rates in line with recent reductions in the BI rate.3% and investment credit at 12%.2% on average this year. But many former rebel fighters have yet to integrate fully into civil society. wages will continue to rise relatively rapidly.8% to Rp837.7% in 2012. accelerating to 6. The lowest minimum wage. coinciding with a spike in violence in the province.eiu. BI is forecasting real GDP growth of 6. will rise by 18.5%. Banking intermediation costs remain relatively high in Indonesia. The monthly minimum wage in the capital.5-5. the highest in the country. as evidenced by the wide spread between the BI rate and the cost of borrowing from the country’s banks. on January 17th.8% in 2013. many workers still do not Country Report February 2012 www. BI has said that it expects inflationary pressures to recede in the coming months.2%.

water. up from three deaths in 2010. The deadly potential of land conflict was evident in the districts of Mesuji in Lampung province and Bima in East Nusa Tenggara province in December 2011. In Mesuji nine local farmers were found to have died in a dispute with palm oil plantation companies between 2010 and 2011. and by staff at a French-owned supermarket chain. Central Java and East Java were not available. Complex and opaque regulatory requirements for the issuance of permits and concessions allow corruption and conflict to thrive. by pilots at the state-owned airline.16 Indonesia earn enough to survive.45 West Gorontalo Kalimatan Central East Kalimatan Sulawesi 1. In early January thousands of farmers and indigenous groups rallied outside the presidential palace and the DPR to demand respect for their land rights and protection against eviction to make way for large-scale plantation and mining operations. Carrefour.90 1.89 0.com © The Economist Intelligence Unit Limited 2012 1. owned by a US firm. Land conflicts are becoming more common A surge of investment in Indonesia’s agricultural and mineral resources has fuelled widespread land conflict in recent years. The 1960 Agrarian Law recognises the rights of local communities over traditional lands inherited from their ancestors.40 PACIFIC OCEAN South China Sea 0.93 E S I A Papua Top 5 minimum wages by province Bottom 5 minimum wages by province Yogyakarta East Nusa Tenggara Note.52 . Investors are often granted concessions for lands to which local communities have traditional claims. minerals and plantations fail to reflect this entitlement. in Papua province. High-profile strikes by workers at the Grasberg mine. 22 people were killed in land disputes in 2011. According to the KPA.53 West Papua 0.33 Aceh 0.84 1. Source: Ministry of Manpower and Transmigration. Monthly minimum wages by province (Rp m) 1. The Agrarian Reform Consortium (KPA). subsequent acts governing the use of forest. Garuda Indonesia.89 INDIAN OCEAN I Jakarta N D O N 0. Farmers opposed to the firms’ operations are alleged to have been killed by local police and company security Country Report February 2012 www. all underscored rising discontent with low wages. However. 2012 minimum wages for West Java. identified 163 cases of land conflict in 2011. up from 106 cases in 2010. A series of strikes towards the end of 2011 underscored a rise in labour-market tension. Investments in land and resource-based industries take place in a highly ambiguous regulatory landscape.eiu. Freeport-McMoRan Copper and Gold.791 land disputes last year. an alliance of nongovernmental organisations. The National Land Agency (BPN) recorded 2.

the rate of inflation accelerated in December. in Bima. gas and water supply (9. from a recent high of 5.3% in the previous month. rose from around Rp6. Inward investment was concentrated in transport.8% year on year. An Australian gold mining company. said that the exploration permit held by SMN would be revoked. In January the energy and mining minister. mining (18. A law passed by the legislature in December 2011 should make it easier for the government to acquire privately owned land for a range of infrastructure projects. Silva Inhutani and Sumber Wangi Alam.6%. On a monthon-month basis.500/kg in late January. Rice prices in West Java. is the majority shareholder in SMN.5trn in 2010. Jero Wacik. In 2011 as a whole consumer prices rose by 5. Rice prices have risen sharply in parts of the country so far this year. discovered that the plantation firms at the heart of the dispute. A third person later died of injuries sustained during the protest. a major production centre. Arc Exploration. storage and communications (19.1%).com © The Economist Intelligence Unit Limited 2012 . electricity. rose by 20. but even by this measure inflation has slowed. dispatched to investigate the deaths in late December.eiu.6%). the metal. with consumer prices rising by 3. but none faced charges over the deaths. at Rp76trn. ahead of the main harvest season. which begins at the end of the first quarter. raising the prospect of much-needed new investment in the country’s Foreign investment rises by 18% in 2011 Country Report February 2012 www. and the chemical and pharmaceutical industries (7.4% on average. Foreign direct investment rose by 18% to Rp175.6%). with consumer prices up by 0. at 4.1% in 2010. while domestic investment was up by 26%. with bad weather and delayed planting also contributing towards the increase. but still within the central bank’s target range of 4-6%. Given that Indonesia’s economy is expected to record another year of respectable growth.2% in August 2011.5%). had paid the police to provide security and protect their assets. the most heavily weighted commodity in the consumer price index. up from Rp208. Economic performance Inflation falls for the fourth month in a row The rate of inflation slowed for the fourth month in a row in December.5% to Rp251.3%. the police shot dead at least two local people who had blockaded a port to protest against a mining exploration permit awarded to Sumber Mineral Nusantara (SMN).6% on average during 2011. Food prices were up by 8. however. The price of food. The practice of paying the police for security at mines and plantations is common but controversial in Indonesia. Five officers were subsequently detained for three days after being found guilty of beating and kicking protestors to clear the port. In the same month. the slowest pace of growth since March 2010. according to Statistics Indonesia (BPS).7bn) in 2011. Core inflation remained slightly faster. up from 5.6% in December—the slowest increase since March 2004.3trn. A government fact-finding team. according to the Investment Co-ordinating Board (BKPM). rose by 3.700 (about 76 US cents) per kilogram in October 2011 to Rp8. from domestic and foreign investors. while the region’s more export-dependent economies faces strong global headwinds. Prices are likely to have remained under upward pressure in January 2012.3trn (US$28.5%). the government is hoping to attract greater foreign investment in 2012. machinery and electronics industries (9. Overall investment in Indonesia.Indonesia 17 staff. compared with an increase of 0.

power plants and other pieces of infrastructure.8% increase in overall investment this year. Country Report February 2012 www.5trn. Under the scheme. Indra Darmawan.com © The Economist Intelligence Unit Limited 2012 . according to the BKPM’s director for investment deregulation. Meanwhile. known officially as Peraturan Pemerintah 52/2011. taxable income will be capped at 30% of the total investment for six years.eiu. among other incentives. resulting in an effective annual tax rate of 5% per year. airports. BKPM is forecasting a 12. A recently approved government regulation that extends the tax incentives available to investors should help the government to achieve its target. As a result. to Rp283. foreign investment is expected to rise by 15%. seaports. The scheme applies to a wide range of industries (129 categories of business activity).18 Indonesia ageing roads.

5 4.332.630 5.8 245.080 20.7 12.4 5.2 6.3 -9. c Economist Intelligence Unit forecasts.1 3.2 250.3 5.2 -1.0 4.549 6.284 -199.102 243. %) Current account (US$ m) Trade balance Goods: exports fob Goods: imports fob Services balance Income balance Current transfers balance Current-account balance External debt (US$ m) Debt stock Debt service paid Principal repayments Interest International reserves (US$ m) Total international reserves Source: IMF.512 21.368 16.643 154.1 16.5 5.014 -85.923 3.731 4.5 10.8 8.9 4.892 11.422.691 -12.0 4.2 4.968 11.251 6.099 2.6 10.484 -11.5 6.eiu.7 8.077 b 25.741 -15.400 10.485 a 3.9 8.3 3.606 -116.577 -27.252 b 7.3 12.0 8.6 6.9 17. b Economist Intelligence Unit estimates.0 7.102 20.177 148.5 16.0 14.9 8.4 13.4 7.6 4.0 6.517 24.9 -0.8 5.1 17.256.061 11.656 51.9 9.931 119.6 22.5 6.6 8.857 4. Country Report February 2012 www.217 25.9 32.683 1.4 -1.006 b 7.0 4.8 3.447 -9.991 10.3 4.1 4.9 14.419 8.1 29.627 158.3 8.0 4.7 19.946.134 202.2 8.267 153.8 12.998 -15.7 -1.1 15.5 8.5 5.8 44. a Actual.3 31.325 -20.931 18.578 10.3 9.9 15.564 25.3 5.1 3.427 25.156 5.4 19.6 8.121 5.8 4.181 -12.7 3.5 30.075 -127.428 4.607 5.881 6.7 15.3 -1.286 140.715 -9.950 12.916 139.397 213.259 -11.353 3.9 29.889 7.949.1 39.284 -11.819 5.4 13.917 23.3 13.0 234.754 118.163 -29. %) Stock of money M1 (% change) Stock of money M2 (% change) Lending interest rate (av.349 117.3 16.7 9.090 b 4.4 22.4 9.924 2008 a 510.226 4.842 -15.263 3.6 -0.5 6.Indonesia 19 Data and charts Annual data and forecast Pl ea se se e g ra p hi c b el ow 2007 a 432.2 7.0 3.7 237.7 12.6 14.189.8 5.211 2011 b 827.8 19.9 6.9 15.2 9.473 -26.5 3.291 4.5 14.435 GDP Nominal GDP (US$ bn) Nominal GDP (Rp trn) Real GDP growth (%) Expenditure on GDP (% real change) Private consumption Government consumption Gross fixed investment Exports of goods & services Imports of goods & services Origin of GDP (% real change) Agriculture Industry Services Population and income Population (m) GDP per head (US$ at PPP) Recorded unemployment (av.6 26.432 5.4 243.6 12.2 24.1 17.0 4. International Financial Statistics.418 -164.8 a 10.646 -88.629 157.0 9.9 13.858 b 96.3 7.140 4.6 4.6 a 16.7 9.424 66.364 125 146.7 6.2 9.0 8.5 4.2 9.3 8.5 15.3 3.7 8.7 25.7 240.852 20.0 8.9 13.641 2009 a 539.9 4.575 7.245 164.1 4.247 21.8 14.329 2013 c 1.306 6.3 30.103 10.113 56.524 5.8 3.090 2012 c 914.5 3.119 2010 a 706.882 -174.8 11.7 9.2 -0.835 b 8.301 158.9 -15.4 23.2 1.0 17.3 2.0 5.712 4.4 38.4 15.603.492 133.864 a 11.7 8.0 17.com © The Economist Intelligence Unit Limited 2012 .2 248. %) Fiscal indicators (% of GDP) Central government budget revenue Central government budget expenditure Central government budget balance Public debt Prices and financial indicators Exchange rate Rp:US$ (end-period) Exchange rate Rp:¥100 (end-period) Consumer prices (end-period.581 b 9.5 4.9 19.3 -1.948 b 21.0 17.7 4.6 9.039.

2 123.7 0.9 5. year on year) Mining at constant 2000 prices (Rp trn) Mining at constant 2000 price (% change.319 1.20 494.976 4.1 171.5 46.022 -32. Sources: International Energy Authority.080 1.094 92.598 -6.151 1.795 6.15 549.3 6.1 3.083 6.9 6.4 2.549 2.991 7.2 6.3 174.276 -4.685 -2.452 7.823 6.897 8.728 -3.3 8.9 135.0 4.0 8.com © The Economist Intelligence Unit Limited 2012 .673 4 Qtr n/a n/a n/a n/a n/a n/a 129.60 6.471 15.0 46.501 53.1 3.9 4.961 5.8 2.4 17.301 1.305 -5.000 9.1 117.2 5.679 38. IMF.1 2. year on year) Wholesale prices (2000=100) Financial indicators Exchange rate Rp:US$ (av) Exchange rate Rp:US$ (end-period) Deposit rate (av. Statistics Indonesia (BPS).1 3.7 4.5 10.95 6.6 5.9 3.93 5.643 16.5 143. Rp trn) M2 (% change.451 16.7 0.223 2 Qtr 573.75 12.9 44.8 4.50 12.2 6.13 6.992 1.93 53.068 7.576 6. Aug 10th 1982=100) Stockmarket index (% change. %) Lending rate (av.2 126.407 73.6 17.00 n/a n/a n/a n/a n/a n/a n/a 3.130 3 Qtr 619.889 41.94 6.098 1.442 9.9 3.1 6.75 12.908 2011 1 Qtr 600.5 8.7 3.1 5.98 38. %) 3-month money market rate (av.2 0.7 122.652 1.7 153.6 5.431 3 Qtr 580.1 6.8 5.91 53.8 139.537 -29.914 61.584 8.1 147.5 0.68 605.3 127.94 6.112 10.489 4 Qtr 592.2 6.6 144. year on year) M2 (end-period.1 46.6 2.8 6.9 151.610 -46.106 -3.1 185.50 13.6 160.8 4.863 -38.388 -38.99 35.8 126.3 1.1 4.2 2. year on year) Prices Consumer prices (2002=100) Consumer prices (% change.0 4.4 169.158 n/a n/a n/a n/a n/a 110.72 656.027 2. year on year) Sectoral trends Manufacturing production (2000=100)a Manufacturing production (% change.1 9. Rp trn) M1 (% change.0 4.597 6. year on year)a Crude oil production (m barrels/day)b Foreign trade (US$ m) Exports fob Imports cif Trade balance Foreign payments (US$ m) Merchandise trade balance Services balance Income balance Net transfer payments Current-account balance Reserves excl gold (end-period) 563.374 2 Qtr 610.523 13. Monthly Oil Market Report.1 19.2 3.452 3.155 -5.9 12.954 -2.964 8.48 5.4 5.8 133.26 5.262 1.233 -2.28 6.231 12.7 0.777 145.2 16.600 8. %) M1 (end-period.9 182.75 12.5 4.7 0.4 13.0 3.9 6.00 37.9 129.9 0.0 2.0 139.3 47.20 Indonesia Quarterly data Pl ea se se e g ra p hi c b el ow 2010 1 Qtr Output GDP at constant 2000 prices (Rp trn) Real GDP (% change. %) Discount rate (end-period.924 6.132 9.94 45.eiu.95 46.8 3.385 1.5 151.709 6.395 -34.088 102.4 2.87 6.995 8.594 -2.936 69.13 6.6 156.2 8.3 47.9 179.046 6.847 -2.704 52.7 167.593 8.9 119.3 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a a Large and medium-sized companies.6 137.589 9. Financial Times.822 2.275 12.4 3.03 6.6 47.9 4.3 9.7 9.6 184.788 -6.4 0.9 8.115 7. year on year) JSE Composite stockmarket index (end-period.50 13.943 7.50 13.786 8.872 974 232 116.4 2.6 5. b Excluding condensates.271 9.6 2. International Financial Statistics.66 6.3 2.95 636.205 83.01 545. year on year) Manufacturing at constant 2000 prices (Rp trn) Manufacturing at constant 2000 prices (% change.8 6.01 580.274 8. Country Report February 2012 www.96 6.229 -44.

5 0.5 17.823 130.914 2011 3.5 13.4 2.1 9.2 5.4 7.952 8.67 121.2 12.2 12.2 12.31 Money supply M1 (end-period.400 8.6 12.549 2.4 12. year on year) 2009 6.5 3.578 130.820 3.6 5.1 3.6 7. year on year) 2009 -1.8 4. %) 2009 11. year on year) 2009 9.2 5.4 9.458 9.81 143.823 8.0 6.822 2.8 14.59 5.333 1.19 2010 138.985 8.355 11.03 145.78 141.0 7. % change.635 3.928 8.87 141.9 14.2 18.630 8.2 12.Indonesia 21 Monthly data Pl ea se se e g ra p hi c b el ow Jan Feb Mar Apr May Jun Exchange rate Rp:US$ (av) 2009 11.56 11.083 2011 9.9 14.0 6.0 5.8 Oct 9.991 9.4 6.409 3.180 9.534 3.027 2010 2.679 3.3 7.7 17.446 8.032 8.060 9.96 5.3 13.7 4.5 12.368 3.6 4.0 2011 7.4 n/a 7.0 12.5 2010 13.7 11.791 2.0 3.3 4.99 141.1 15.866 11.704 3.6 7.2 5.3 9.323 3.748 8.8 10.0 n/a 14.3 13. Aug 10th 1982=100) 2009 1.434 1.9 6.0 7.468 3.2 -2.5 13.1 2010 10.3 4.050 8.5 5.3 13.041 8.1 18.016 9.0 6.1 17.5 16.7 4.0 14.340 10.340 10.6 11. % change.0 3.08 141.0 16.169 9.7 2.2 16.057 8.2 4.917 2.8 11.508 9.965 8.6 -7.5 6.3 8.5 7.2 6.0 15. year on year) 2009 17.7 8.545 8.8 3.2 10.9 4.52 142.342 3.36 144.5 6.25 140.1 7.0 8.2 4.549 2.7 16.3 9.6 8.611 2.8 n/a 4.1 15.6 8.0 JSE Composite stockmarket index (end-period. % change.3 13.9 6.9 6.6 2011 6.5 Jul 10.96 143.2 0.2 5.460 8.069 4.1 -5.2 8.891 9.88 139.9 4.5 4.6 2010 5.4 -0.2 4.1 n/a 13.5 2010 13.550 10.2 13.4 1.980 11.8 14.068 135.7 7.7 9.4 18.848 10.59 143.8 15.18 114.7 14.096 9.6 -0.8 -5. %) 2009 15.com © The Economist Intelligence Unit Limited 2012 .2 Aug 9.4 19.3 18.4 7.835 134.4 18.7 5.3 2010 7.58 129.8 5.2 2011 12.713 10.79 141.889 Consumer prices (av.7 7.0 7.1 14.347 9.777 2.6 Country Report February 2012 www.9 8.7 13.9 7.842 2.537 8.8 10.3 11.3 -1.971 2.4 5.5 13.4 13.6 6.153 2011 9.4 16.285 1.5 3.225 2010 9.4 4.0 7.723 1.7 4.7 19.5 2.3 3.5 13.1 19.2 7.15 141.3 19.4 4.2 Manufacturing production (av.0 7.7 4.416 3.6 9.7 4.558 8.7 10. year on year) 2009 6.920 8.6 6.715 2.13 143.723 9.3 7.60 144.eiu.978 10.50 113.2 0.2 15.3 12.1 15.2 12.7 2010 5.7 10.7 7.6 6.082 3.131 2.07 141.012 9.4 -4.0 7.988 8.2 Sep 9.470 3.1 16.1 10.8 4.566 Exchange rate Rp:US$ (end-period) 2009 11.1 13.0 2011 21.14 12.574 8.9 Nov 9. % change.9 7.6 2010 3.0 15.5 2.0 2.575 10.929 8.1 3.179 11.0 13.8 7.9 17.8 16.71 143.0 2.3 Dec 9.013 9.1 7.86 2.480 9.0 2011 6.1 7.4 n/a 13.9 3.597 Real effective exchange rate (2000=100.4 16.82 6.9 7.797 2.0 7.5 14.2 12.709 8.3 12.924 8.501 3.2 5.9 1.1 Deposit rate (av.6 -3.97 141.837 3.79 143.6 Money supply M2 (end-period.1 n/a 2.1 2.365 9.681 8.0 2011 7.2 19.79 2011 139.8 7.7 6.0 7.31 140.8 2011 17.8 6.5 Producer prices (av.7 0.7 8.3 13.531 3.035 9.78 145.2 15.297 9.0 5.948 9.817 8.8 4. CPI-based) 2009 116.2 6.5 7.170 133.226 9.4 13.5 20.508 129.017 9.894 8.0 Lending rate (av.335 9.1 14.4 6.5 17.1 5. % change.2 8.7 12.6 1.8 12.0 n/a 3.209 2010 9.5 4.7 5.1 6.075 9.99 127.8 13.7 12.115 9.0 12.1 0.

596 11.559 11.231 96.430 12.300 13.141 2.106 89.727 18.555 3.776 48.120 15.400 16.668 1.665 1.554 6.568 2010 2.533 2.526 63.936 11.923 8.854 Country Report February 2012 www.105 1.169 1.707 12.147 n/a 3.606 14.747 1.544 13.048 3.673 109.182 17.035 12.230 58.287 Goods imports cif (US$ m) 2009 6.543 8.676 2011 2.374 110.280 7.489 88.334 102. Jun 9.eiu.601 5. International Financial Statistics.418 118.092 83.080 8.961 2.750 14.366 16.207 1.491 9.688 2010 67.528 2.315 55.381 73.908 n/a 55.326 2.720 Sources: IMF.075 837 1.001 -139 1.978 62.144 69.707 7.061 1.487 17.446 570 3.458 55.280 1.424 Nov 10.365 52.com © The Economist Intelligence Unit Limited 2012 .213 112.684 12. US$ m) 2009 48.760 15.236 9.888 14.374 Oct 12.563 92.348 16.973 11.415 16.172 15.243 14.004 67.517 9.387 7.663 54.130 Jul 9.673 110.980 2011 12.462 Foreign-exchange reserves excl gold (end-period.641 2010 9.879 120.850 71.330 18.626 1.753 2011 92. Haver Analytics.382 12.939 6.115 76.826 Trade balance fob-cif (US$ m) 2009 680 1.633 16.654 15.22 Indonesia Jan Feb Mar Apr May Goods exports fob (US$ m) 2009 7.615 8.813 2.209 2010 11.072 1.211 Aug 10.774 12.683 n/a 63.223 75.554 18.486 14.958 9.648 9.572 Sep 9.048 2.060 78.008 15.683 12.657 2011 14.775 15.802 799 2.498 10.666 3.454 9.564 n/a Dec 13.880 1.431 116.419 8.626 16.830 n/a 10.843 12.397 1.167 12.815 13.546 59.

0 10.9% Japan 12.1% China 9.3% Origins of imports.9% Source: Economist Intelligence Unit.0 2.0 Consumer price inflation (av.0 2007 08 09 10 11 12 13 4.0 4.0 8.0 -3.0 2.0 2007 08 09 10 11 12 13 Asia (excl Japan) World 12.0 1.0 5.0 2.5 -2.0 0.0 9.0 6. Source: Economist Intelligence Unit.0 0.0 -2.eiu.com © The Economist Intelligence Unit Limited 2012 .0 0.Indonesia 23 Annual trends charts Pl ea se se e g ra p hi c b el ow Annual trends charts Real GDP growth (% change) Indonesia 10.5 2007 08 09 10 11 12 13 Asia (excl Japan) 10.5 -1. %) Indonesia Asia (excl Japan) World Source: Economist Intelligence Unit. 2010 (share of total) Others 56.0 6.6% China 15.1% Singapore 8.0 -0.5 -3. Source: Economist Intelligence Unit. 2010 (share of total) Others 50.0 8. Destinations of exports.0 -2. Budget balance (% of GDP) Indonesia 1.0 4. Country Report February 2012 www.0 -4.0 3.5 0.7% Singapore 14.0 Recorded unemployment (%) Indonesia Asia (excl Japan) 2007 08 09 10 11 12 13 Source: Economist Intelligence Unit.0 6.0 7.5% US 6.0 0.9% US 9.0 -1.0 8. Source: Economist Intelligence Unit.0% Japan 16.

0 12.000 Exchange rate (Rp:US$.0 0.0 16.0 2.000 11.0 15.0 Q1 2003 Q1 04 Q1 05 Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 5.0 0.0 10.0 2.0 3.0 6.0 -5.0 -15.eiu.0 0.0 8. av) Q1 2003 Q1 2003 Q1 04 Q1 05 Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Source: Economist Intelligence Unit. Interest rates (av.0 15. year on year 15.500 11. Source: Economist Intelligence Unit.0 -15. Source: Economist Intelligence Unit.0 -5.0 -20.0 5.com © The Economist Intelligence Unit Limited 2012 .0 10.0 Q1 2003 Q1 04 Q1 05 Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Imports of goods & services.000 8.0 Q1 2003 Q1 04 Q1 05 Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 0.0 5.0 -10.0 -10.0 7.0 1.0 6.0 Money market rate 12.0 5.000 10. Source: Economist Intelligence Unit.0 4.0 Exports of goods and services (% change) Year on year Quarter on quarter Q1 2003 Q1 04 Q1 05 Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Source: Economist Intelligence Unit. quarter on quarter 25.0 Quarter on quarter 20.0 18. Imports and domestic demand (% change) Domestic demand. %) Year on year Quarter on quarter Source: Economist Intelligence Unit.0 10.0 Consumer price inflation (av.0 0. %) Lending rate 20.000 9.0 4.0 20.0 14.0 -20.500 9. Country Report February 2012 www.0 10.500 Q1 04 Q1 05 Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 8.500 10.24 Indonesia Quarterly trends charts Pl ea se se e g ra p hi c b el ow Quarterly trends charts Real GDP growth (% change) Year on year 8.

0 15. inverted scale) 8.0 Producer prices 16.0 7. %) Deposit rate Lending rate Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 09 10 11 2008 Source: Economist Intelligence Unit.0 10.eiu.0 M2 20.0 5.0 8.500 12. Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 2008 09 10 11 Source: Economist Intelligence Unit.0 30.0 20.0 -5.0 0. Country Report February 2012 www. av) 140 120 100 80 60 40 20 Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul 2008 09 10 11 Source: Economist Intelligence Unit.0 15.0 13.0 0. goods only) Exports Imports Balance Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 2008 09 10 11 Source: Economist Intelligence Unit. Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 09 10 11 2008 Source: Economist Intelligence Unit.000 8.0 5.000 10.000 5.000 Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 2008 09 10 11 Source: Economist Intelligence Unit.0 20.000 Foreign trade (US$ m.000 15.000 11. Exchange rate (Rp:US$.000 9. Oil: Brent crude price (US$/b. av.0 12.000 0 -5.0 9. year on year) Consumer prices 40.com © The Economist Intelligence Unit Limited 2012 .0 11. Monetary aggregates (% change.500 9.0 25.500 11.0 35.0 15.0 10.000 10.0 10.500 10.0 -10.0 6. year on year) M1 25.0 14.0 Interest rates (av.Indonesia 25 Monthly trends charts Pl ea se se e g ra p hi c b el ow Monthly trends charts Price inflation (% change.

0 10.0 16.824. Gross domestic product (% change.0 Sources: Economist Intelligence Unit estimates. national sources.0 14. year on year) Pakistan India Vietnam Bangladesh Myanmar Papua New Guinea Laos Sri Lanka Indonesia Cambodia Philippines Thailand China South Korea Australia Singapore Hong Kong New Zealand Malaysia Taiwan Japan -2. national sources.717. Country Report February 2012 www.0 8.0 2. Sources: Economist Intelligence Unit estimates. 2010 Gross domestic product (US$ bn.0 4. market exchange rates) Australia Singapore Japan New Zealand Hong Kong South Korea Taiwan Malaysia Thailand China Indonesia Sri Lanka Philippines India Papua New Guinea Vietnam Laos Pakistan Cambodia Myanmar Bangladesh 0.1 5. market exchange rates) China Japan India Australia South Korea Indonesia Taiwan Thailand Malaysia Hong Kong Singapore Philippines Pakistan New Zealand Vietnam Bangladesh Sri Lanka Myanmar Cambodia Papua New Guinea Laos 0 100 200 300 400 500 600 5.0 40.0 8.2 1.244.0 20.0 50.0 12.0 2.26 Indonesia Comparative economic indicators Pl ea se se e g ra p hi c b el ow Comparative economic indicators.5 Gross domestic product per head (US$ '000.com © The Economist Intelligence Unit Limited 2012 .0 Sources: Economist Intelligence Unit estimates.0 6.0 Consumer prices (% change.eiu.0 4.014.0 30.0 700 800 10. Sources: Economist Intelligence Unit estimates. national sources. national sources.0 12.8 1.488.4 1. year on year) Singapore Taiwan China India Laos Sri Lanka Thailand Philippines Malaysia Papua New Guinea Hong Kong Vietnam South Korea Indonesia Bangladesh Cambodia Myanmar Japan Pakistan Australia New Zealand 0.0 10.0 0.0 6.0 14.0 60.

163 sq km (before deductions for sea area now under the control of Timor-Leste) 5. Central Zone 8 hours ahead.Indonesia 27 Country snapshot Basic data Land area Sea area (exclusive economic zone) Total area Population Main towns 1. 24-31°C (average daily minimum and maximum).166. April 6th.606 sq km 238m (Statistics Indonesia 2010 census) Population in ‘000 (2010 census) Jakarta (capital) Surabaya Bandung Climate Weather in Jakarta (altitude 8 metres) Tropical Hottest months. Christmas Day.com © The Economist Intelligence Unit Limited 2012 . as well as some 250 other regional languages and dialects. 23-29°C.445 1. Islamic New Year. January 23rd. August 17th.179 Medan Palembang Semarang 2. Mouloud. March 23rd. November 15th. August 19th. January 1st. Ascension Day.556 Languages Measures Currency Time Fiscal year Public holidays Country Report February 2012 www.070. December 25th 9. Waisak Day.770:US$1 Western Zone 7 hours ahead of GMT. January-February. June 16th. Good Friday.608 2. Idul Adha. Average exchange rate in 2011: Rp8. February 4th. English has replaced Dutch as the main second language and is widely spoken in government and business circles Metric system Rupiah (Rp). wettest months. 300 mm average rainfall Indonesian (Bahasa Indonesia).443 sq km 3.098 1.904. January-February. May 6th. October 26th. Idul Fitri.eiu. April-May. Lailat Al Miraj. coldest months. Nyepi.765 3. Chinese New Year. May 17th. Eastern Zone 9 hours ahead January 1st-December 31st (since 2001) New Year. Independence Day.

eiu.com © The Economist Intelligence Unit Limited 2012 . with authority to appoint the cabinet The president. Golkar and the Indonesian Democratic Party-Struggle (PDI-P). July 2009 (presidential). the National Awakening Party (PKB) and the United Development Party (PPP) There are three nationalist secular parties: the PD. the National Mandate Party (PAN). but recent constitutional amendments have given the legislature an expanded role The presidency is the highest executive office. security & social affairs Culture & tourism Defence Education Energy & mineral resources Finance Foreign affairs Forestry Health Home affairs Industry Justice & human rights Manpower & transmigration Public works Religious affairs Social affairs Trade Transport Darmin Nasution Susilo Bambang Yudhoyono Boediono Suswono Hatta Rajasa Agung Laksono Djoko Suyanto Mari Pangestu Purnomo Yusgiantoro Muhammad Nuh Jero Wacik Agus Martowardojo Marty Natalegawa Zulkifli Hasan Endang Rahayu Sedyaningsih Gamawan Fauzi M S Hidayat Amir Syamsuddin Muhaimin Iskandar Djoko Kirmanto Suryadharma Ali Salim Segaf Aljufri Gita Wirjawan Ernst Evert Mangindaan Main political organisations Central bank governor Country Report February 2012 www. the PKB. Golkar. The other main parties—the PPP. the PAN and the PKS— have an Islamic orientation President Vice-president Key ministers Agriculture Co-ordinating minister for the economy Co-ordinating minister for people’s welfare Co-ordinating minister for political. Next elections: 2014 (DPR and presidential) Mr Yudhoyono’s second-term government contains representatives of the Democratic Party (PD). Susilo Bambang Yudhoyono The People’s Consultative Assembly (MPR) consists of a 550-member House of People’s Representatives (DPR) and a 128-member Regional Representatives’ Council (DPD) April 2009 (DPR). the Prosperous Justice Party (PKS).28 Indonesia Political structure Official name Form of government Executive Head of state National legislature National elections National government Republic of Indonesia Power has historically been concentrated in the hands of the president.

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