Total 29 provinsi Indonesia telah mengkonfirmasi upah minimum regional baru untuk tahun 2015. Secara keseluruhan (mengecualikan empat provinsi yang tersisa), rata-rata upah minimum Indonesia naik 12,77% pada basis year-on-year (y/y) di tahun 2015. Meskipun kenaikan ini cukup signifikan, kenaikan ini lebih kecil dibandingkan kenaikan upah minimum Indonesia di tahun 2014 (19,10% y/y). Kenaikan upah minimum terbesar terjadi di Provinsi Bangka Belitung (28%), sementara kenaikan upah terendah terjadi di Riau (0,58%).

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International credit rating agency Moody's Investors Service is positive about the subsidized fuel price hike that was conducted by the government of Indonesia on Monday (17/11) as it shows commitment of the government to implement reforms that support the strengthening of the economy, such as curbing Indonesia’s fiscal and current account deficits. Moody’s estimates that these developments are positive for the country’s sovereign rating (now at Baa3/stable) as well as for state-owned energy firm Pertamina (Baa3/stable).

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Main news headlines in Indonesia still cover the higher subsidized fuel prices implemented starting from the early hours of Tuesday (18/11). The previous evening, Indonesian President Joko Widodo had announced that prices of subsidized gasoline and diesel were to be raised by over 30 percent, immediately leading to long queues at local gas stations as well as public outcry as people’s purchasing power will diminish. Analysts and economists, however, agree that this move is correct and can lead to structurally higher GDP growth.

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The central bank of Indonesia decided to raise its key interest rate (BI rate) by 25 basis points from 7.50 percent to 7.75 percent on Tuesday (18/11) in a response to the subsidized fuel price hike. One day earlier, Indonesian President Joko Widodo had announced that prices of subsidized gasoline and diesel were to be raised by more than 30 percent starting from midnight in an effort to create more fiscal space for economic and social development. This move is expected to result in accelerated inflation in Southeast Asia’s largest economy.

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