The document summarizes recent positive economic developments in Indonesia. GDP growth was 6.2% in Q2 2010 and is projected to be 5.5-6.0% for the full year. Inflation is estimated to remain within the target range of 5%±1%. The balance of payments posted a surplus in Q2 and international reserves increased. Banking stability was maintained with strong capital levels and low non-performing loans. Fiscal policy aims to continue stimulus while reducing debt, with the state budget targeting a deficit of 1.6% of GDP.
2. Table of Contents I . Executive Summary II . Indonesia Story: as Acknowledged by Rating Agencies III . Positive Macroeconomic Developments IV. Fiscal Policy and State Budget 2010
7. Indonesia Development Policy is based on a ‘Triple Track Strategy’ 1st Pro-Growth: Increase Growth by prioritizing export and investment 2nd Pro-Job : Boost up the real sector in order to create jobs 3rd Pro-Poor: Revitalize agriculture, forestry, maritime, and rural economy to reduce poverty Real Sector: Indonesia Development Policy Source: Coordinating Ministry for Economic Affairs
19. Budget Deficit / GDP Public Finances is a fundamental strength of the Indonesian economy; most of Indonesian ratios are strong or stronger than its peers; Fiscal Budget deficit has traditionally been limited and remained contained in 2009. Fiscal Stimulus did not impact much on fiscal deficit in 2009 Budget Deficit / GDP (%) Budget Deficit / GDP 2009* vs . Emerging Markets Countries Source: Ministry of Finance
20. State Budget 2010 and Revised Budget 2010 Source: Ministry of Finance
21. DEPARTEMEN KEUANGAN RI BADAN ANALISA FISKAL DEPARTEMEN KEUANGAN RI BADAN ANALISA FISKAL DEPARTEMEN KEUANGAN RI BADAN ANALISA FISKAL DEPARTEMEN KEUANGAN RI BADAN ANALISA FISKAL State Budget 2010 and Revised Budget 2010 - Revenue Source: Ministry of Finance
22. State Budget 2010 and Proposed Revised Budget 2010 - Expenditures Source: Ministry of Finance
23. State Budget 2010 and Revised Budget 2010 - Overall Balance Source: Ministry of Finance
25. Debt to GDP Ratio (% of GDP) Debt Service to GDP Ratio (%) Debt Ratio Source: Ministry of Finance Notes: * = Preliminary ** = Very Preliminary *** = Very Very Preliminary , GDP number based on Budget 2010 Assumption [Outstanding as of May, 2010] Table of Debt to GDP Ratio
Notes de l'éditeur
Let me start with the growth story of Indonesia in 2009 Our economy is balanced and diversified. It has been growing at rates in excess of 6% in 2007 and 2008. Economic growth in 2009 has been impacted by the global economic slowdown but reached 4.2% year-on-year for the first three quarters of 2009
Indonesia’s banking sector continued to be stable and profitable in 2009. Free from international funding, it has been protected from the global financial turmoil, remained free from toxic assets and posted good results with an average CAR of 17.8% and declining net NPL at 1.3% as of September 2009. Measures have been taken to alleviate the impact of the global crisis on the domestic economy including an enhanced supervision on structured products, an extension of swap lines from 7 days to 1 month and Bank Indonesia’s renewed provision of short-term liquidity to provide access for all banks in the event of severe liquidity constraints.
I would like to highlight here the strength of the Republic Public Finances; our realized Budget deficit in 2009 of 1.6% of GDP is among the lowest compared to other emerging countries