The World Bank revised down its forecast for economic growth in Indonesia for the year 2014. In the July 2014 edition of the Indonesia Economic Quarterly, the institution projects economic growth in Southeast Asia’s largest economy at 5.2 percent, slightly down from its previous forecast of 5.3 percent. The downgrade is the result of a weaker outlook for commodity prices and tighter credit conditions. Moreover, the growing fiscal deficit contributes to the challenges that will be faced by the new government (which will be inaugurated in October 2014).

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With only one more day to go before the General Elections Commission (KPU) will release the official result of the July 2014 presidential election, it seems almost certain that it will take a Constitutional Court ruling for the final judgement. Over the weekend, data from KPU indicates that Joko Widodo has won the election by a margin of about five percentage points. However, his rival Prabowo Subianto has already stated that he will challenge the result as he claims that there are indications of fraud at several polling stations.

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The second major disaster involving an airplane of Malaysia Airlines within the time span of a few months can lead to bankruptcy of the debt-ridden airliner. On Friday (18/07), one day after the crash of the Boeing 777, which was presumably shot down by pro-Russia separatists in Ukraine, shares of the company slid 11 percent on the Malaysia Stock Exchange. This year so far, its shares have declined 36 percent. Malaysia Airlines has not been able to post a profit in the last three years amid fierce competition and the high oil price.

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On 20 July 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve political and economic topics such as the presidential election, the influence of the Malaysia Airlines crash, two high profile corruption cases, coal mining, an update on July inflation, and more.

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