Government of Indonesia Needs to Revise GDP Growth Target for 2014

Currently, the government's GDP growth target for 2014 is still set between 5.8 and 6.0 percent, but few expect that this target can be met, despite the fact that household consumption and foreign and domestic investment continue to grow strongly. Indonesian Finance Minister Chatib Basri stated that the 2014 GDP growth target should be revised down to the range of 5.1 to 5.5 percent, which is in line with the growth targets of Indonesia's central bank (5.1 to 5.5 percent) and the Ministry of National Development Planning (5.3 to 5.5 percent).

The slowing economic growth in Southeast Asia's largest economy is also self-inflicted as the government and central bank decided to safeguard financial stability instead of seeking higher economic growth. By curbing domestic consumption, particularly imports, through the higher interest rate environment, tax measures and the subsidized fuel prices hike in June 2013, the government preferred to ease the current account deficit which stood at a record high in the second quarter of 2013 (at 4.4 percent of GDP) and puts great pressure on the rupiah exchange rate as well as on investors' confidence.

Indonesia's Quarterly GDP Growth 2009–2014 (annual % change):

Year	Quarter I	Quarter II	Quarter III	Quarter IV
2014	5.21
2013	6.03	5.89	5.62	5.78
2012	6.29	6.36	6.16	6.11
2011	6.45	6.52	6.49	6.50
2010	5.99	6.29	5.81	6.81
2009	4.60	4.37	4.31	4.58

^{Source: Statistics Indonesia (BPS)}

Gross Domestic Product of Indonesia 2006-2013:

	2006	2007	2008	2009	2010	2011	2012	2013
GDP (in billion USD)	285.9	364.6	432.1	510.2	539.4	706.6	846.8	878.0
GDP (annual percent change)	5.5	6.3	6.1	4.6	6.1	6.5	6.2	5.8
GDP per Capita (in USD)	1,643	1,923	2,244	2,345	3,010	3,540	3,592	-

^{Sources: World Bank, International Monetary Fund (IMF) and Statistics Indonesia (BPS)}

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