January 28 2015
The Indonesian government, central bank (Bank Indonesia) and Commission XI of the House of Representatives (DPR) agreed to revise several macroeconomic targets in the Revised 2015 State Budget (APBN-P 2015). The revisions include the country’s economic growth (GDP) pace, the average rupiah exchange rate, and inflation target. In essence, the revisions indicate that Indonesian authorities have become less optimistic about the Indonesian economy in 2015 amid external pressures.
Most importantly, Indonesia’s GDP growth was downgraded from 5.8 percent year-on-year (y/y) to 5.7 percent (y/y), while the average rupiah rate was downgraded from IDR 12,200 per US dollar to IDR 12,500 in the Revised 2015 State Budget. These changes are the result of external pressures as global economic growth remains sluggish thus pushing global commodity prices down (and therefore limiting Indonesia’s foreign exchange earnings from commodity exports).
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