Indonesia Economy

Sources of long-term capital, particularly needed for large-scale projects in infrastructure, remain more elusive in Indonesia than in neighbouring economies. The contribution of pension funds and insurance companies has remained limited, yet the size of the mutual fund industry has grown significantly. Interest will likely grow further when...

Despite a history of balance-of-payments crises caused by rapid swings in Indonesia’s current account balance, portfolio investors have by and large returned with confidence to the country’s capital markets since the recovery from the 2008 crisis – and this despite short-term corrections such as those during the summer of 2011. Although still...

In an uncertain global economic environment, emerging markets like Indonesia have faced volatile inflationary pressures. While local monetary authorities have had to quickly adapt to a shifting balance between inflation and economic growth, the government continues to keep the prices of necessities down through a mix of price controls and imports...

Although the country has already made strides to improve its investment climate, further bureaucratic reforms meant to streamline procedures and encourage private investment are central to Indonesia’s ambitions over the next 15 years. After years of centralised rule under Suharto, the initial “big bang” of decentralisation in 2001 wrought its own...

While government spending has not been a key driver of growth thus far, monetary policy has remained the key instrument of macro-economic management. Affected by balance-of-payments crises exacerbated by currency volatility, the central bank has maintained a watchful eye on the rupiah, which rose 14.4% against the dollar in 2010 and stands as the...