According to Finance minister Chatib Basri, the Indonesian government expects the country's gross domestic product (GDP) to have grown by 6.1 percent in the first six months of 2013. This forecast falls short of the government's 6.3 percent GDP growth assumption in the state budget (APBN). Basri stated that the lower outcome is due to global factors, such as slowing economic growth in China and India. But the government's assumption is more optimistic than the forecast of the central bank, which expects growth between 5.1 and 5.9 percent.

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The Indonesia Investment Coordinating Board (BKPM) expects that investments in the second quarter of 2013 will grow by 25 percent to IDR 96.13 trillion (USD $9.6 billion) compared to Q2-2012. Although Indonesia's economic growth is under threat of slowing down to below an annual growth rate of six percent, the government agency still believes that total investments in 2013 can meet the target of IDR 390 trillion (USD $39 billion). Investments in Q1-2013 were recorded at IDR 93 trillion.

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A discount war ahead of Lebaran, the traditional celebration that follows after the holy fasting month of Ramadan is finished and when many Indonesians go back to their place of origin for a few days, is expected to spur car sales in July. It is a normal phenomenon that car sales increase ahead of Lebaran because an amount of people need a new car to carry them back to their places of birth. But this year the increase in car sales is expected to exceed sales figures in previous years as wholesalers use discount actions to reduce their car stockpiles.

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Standard Chartered Bank expects economic growth in Indonesia in 2013 to remain robust at 6.2%. The bank believes this is a realistic assumption amid global economic uncertainty and higher subsidized fuel prices which limits people's purchasing power. The greatest pillar of support for Indonesia's GDP growth is domestic consumption, and which is supported by Indonesia's demographic composition as the country not only has a large population (over 240 million people), but also a young one (half of the population is below thirty years of age).

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In its latest report, titled Asian Development Outlook Supplement, the Asian Development Bank (ADB) has downgraded its forecast for economic growth in both 2013 and 2014 for developing Asia due to weak demand from industrial countries and slowing economic growth in China. The ADB revised down its growth forecast for developing Asia by 0.3 percent to 6.3 percent in 2013 and 6.4 percent in 2014. The Manila-based development bank also expects commodity prices to fall sharper than previously estimated. 

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After the World Bank signaled slowing economic growth in Indonesia, American multinational financial services corporation Morgan Stanley also detects problems in Southeast Asia's largest economy. According to Jonathan Garner, chief Asia and emerging-market strategist for Morgan Stanley, Indonesia’s stock market is the most vulnerable stock market in Southeast Asia in terms of sudden capital outflows. Morgan Stanley downgraded Indonesia's equities to underweight from equal weight and labeled the country as "a relatively over-owned country".

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On 2 July 2013, the World Bank released its July edition of the Indonesia Economic Quarterly. The report, titled Adjusting to Pressures, touches on the key developments over the past three months in Indonesia’s economy and places these in a longer term and global context. It regularly updates the outlook for the country’s economy and social welfare, and provides a more in-depth examination of selected economic and policy topics, as well as analyses of medium term development challenges.

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Unemployment in Indonesia is expected to fall to 5.7 percent of Indonesia's total labor force at the end of 2013. In 2014, the figure may further decline to 5.1 percent if global and domestic conditions are conducive and if the government can provide sufficient support through job creation. These forecasts were presented by Muhaimin Iskandar, Minister of Manpower and Transmigration. The minister mentioned that each one percent in GDP growth will create more than 350,000 jobs.

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Indonesia's government expects expenditure on subsidized fuels in 2014 to amount between IDR 190-220 trillion (USD $19.2 to 22.2 billion). A high official at Indonesia's Finance Ministry, Robert Pakpahan, said that the assumption is based on a subsidized fuel quota of 48 to 51 million kiloliters and an Indonesian crude oil price of USD $100-115 per barel. Despite having raised the price of subsidized gasoline by 44 percent last week, it means that both volume quota and total expenditure on fuel subsidies will rise in 2014.

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According to Bambang Brodjonegoro, current head of the Fiscal Agency (a department under the wings of Indonesia's Finance Ministry), Indonesia's economy will grow 6.0 percent in the second quarter of 2013. This growth rate is lower than originally forecast due to the impact of a global unstable environment. Economic growth in Q2-2013 is also likely to be below the Q1-2013 result of 6.02 percent. A few weeks ago, the government of Indonesia had already revised down its GDP forecast for 2013 from 6.8 percent to 6.3 percent.

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The Standard Chartered Bank expects Indonesia's economy to expand 5.8 percent in 2014, followed by a 6 percentage growth in 2015 as an improving global economy has a positive effect on emerging economies, including Indonesia. The world economy is estimated to grow between 3.2 and 3.5 percent this year and expected to accelerate to 3.8 percent in 2015. David Mann, the regional Head of Research at the Standard Chartered Bank in Asia, said that Indonesia's economic performance in 2013 was negatively influenced by external factors.

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ICRA Indonesia, an independent credit rating agency and subsidiary of ICRA Ltd. (associate of Moody's Investors Service), publishes a monthly newsletter which provides an update on the financial and economic developments in Indonesia of the last month. In the December 2013 edition, a number of important topics that are monitored include Indonesia's inflation rate, the trade balance, the current account deficit, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt of the newsletter:

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Over a decade ago, economist Jim O'Neill became famous for the introduction of the term BRIC (indicating the promising economic perspectives of Brazil, Russia, India and China). Now the BRICs have lost some of its significance, he has turned to a new acronym: MINT. These MINT countries - consisting of Mexico, Indonesia, Nigeria and Turkey - share a number of features that make them potential giant economies in the future: promising demographic structure, strategic geographical location, and commodity-rich soil.

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On Thursday 12 December 2013, Indonesia's central bank (Bank Indonesia) announced that the country's benchmark interest rate (BI rate) remains unchanged at the level of 7.50 percent in December 2013. This announcement was a bit surprizing as about 80 percent of analysts expected Bank Indonesia to raise the BI rate in order to support the depreciating Indonesia rupiah exchange rate. Starting the year at IDR 9,670 per US dollar, the rupiah has fallen around 25 percent to IDR 12,081 per US dollar.

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The central bank of Indonesia (Bank Indonesia) estimates that Indonesia's current account deficit will ease to 3.5 percent of the country's gross domestic product (GDP) by the end of 2013. Indonesia's wide current account deficit has been one of the major financial troubles this year and managed to weaken investors' confidence in Southeast Asia's largest economy. Thus, Indonesia became one of the hardest hit emerging countries after the Federal Reserve started to speculate about an ending to its quantitative easing program.

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In Bank Indonesia's board of governors' meeting, which was held on Thursday (12/12), it was decided to maintain the country's benchmark interest rate (BI rate) at 7.50 percent. This decision was in line with market expectation but was unable to support the Jakarta Composite Index and rupiah exchange rate. The lending facility and deposit facility interest rates were also maintained at 7.50 percent and 5.75 percent respectively. Bank Indonesia decided not to change the rate as Indonesia's inflation outlook for 2014 is still within target.

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Rudi Wahyono, Executive Director of the Indonesian Center for Information and Development Studies (Cides), believes that Indonesia's economic expansion in 2014 will be divided in two stages: before and after the legislative and presidential elections. Before the 2014 elections, Wahyono expects that economic growth will be slightly lower at 5.7 percent compared to the period after the elections when growth is expected to hit 6 percent. Growth in the first half of 2014 will be less strong as investors are waiting for the election results.

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ICRA Indonesia, an independent credit rating agency and subsidiary of ICRA Ltd. (associate of Moody's Investors Service), publishes a monthly newsletter which provides an update on the financial and economic developments in Indonesia of the last month. In the November 2013 edition, a number of important issues that are monitored include Indonesia's inflation rate, the trade balance, the current account deficit, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt of the newsletter:

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Currently, one of Indonesia's main financial issues (and one which puts serious pressures on the Indonesian rupiah exchange rate) is the country's wide current account deficit. According to data from Statistics Indonesia, Indonesia's current account deficit totaled USD $8.4 billion in the third quarter of 2013. This figure is equivalent to a whopping 3.8 percent of Indonesia's gross domestic product (GDP). Generally, a current account deficit that exceeds 2.5 percent of GDP is considered unsustainable.

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With having more than 10,000 islands, Indonesia offers an unique natural scenery. The country contains all sorts of attractive options for tourism, including seas, beaches, mountains and much more. Not surprisingly, tourist arrivals in Indonesia continue to grow. Based on data from Statistics Indonesia (BPS), released in early November 2013, the number of foreign tourist arrivals between January and September 2013 reached 6.41 million, an increase of 8.8 percent from the same period last year.

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