Indonesia Economic Quarterly, October 2011
External events have dominated economic developments for Indonesia over the past quarter. The outlook for global growth has weakened and the euro zone sovereign debt crisis has intensified. International risk aversion and market volatility have increased, although they remain well below levels seen in late 2008. Equity markets have fallen and emerging markets have seen capital outflows, putting downward pressure on their currencies. Indonesia's domestic economic performance has continued to be strong but, as in other countries in the region, its financial markets have not been immune from this turbulence. Indonesia's domestic drivers of growth, its solid fiscal position, accumulation of reserves, and strengthened financial sector performance make it relatively well-placed to deal with shocks arising from the above scenarios. This improved resilience to external shocks, and a strong policy response, was seen during the 2008- 09 crisis. The final piece looks at the core development challenge of how to make growth more inclusive, as well as higher, focusing on an analysis of the province of East java.
Summary: | External events have dominated economic
developments for Indonesia over the past quarter. The
outlook for global growth has weakened and the euro zone
sovereign debt crisis has intensified. International risk
aversion and market volatility have increased, although they
remain well below levels seen in late 2008. Equity markets
have fallen and emerging markets have seen capital outflows,
putting downward pressure on their currencies.
Indonesia's domestic economic performance has continued
to be strong but, as in other countries in the region, its
financial markets have not been immune from this turbulence.
Indonesia's domestic drivers of growth, its solid
fiscal position, accumulation of reserves, and strengthened
financial sector performance make it relatively well-placed
to deal with shocks arising from the above scenarios. This
improved resilience to external shocks, and a strong policy
response, was seen during the 2008- 09 crisis. The final
piece looks at the core development challenge of how to make
growth more inclusive, as well as higher, focusing on an
analysis of the province of East java. |
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