Supported by funding from the Australian Government (Department of Foreign Aﬀairs and Trade, DFAT), under the Support for Enhanced Macroeconomic and Fiscal Policy Analysis (SEMEFPA) program.
INDONESIA ECONOMIC QUARTERLY
High expectations March 2015
Preface The Indonesia Economic Quarterly (IEQ) has two main aims. First, it reports on the key developments over the past three months in Indonesia’s economy, and places these in a longerterm and global context. Based on these developments, and on policy changes over the period, the IEQ regularly updates the outlook for Indonesia’s economy and social welfare. Second, the IEQ provides a more in-depth examination of selected economic and policy issues, and analysis of Indonesia’s medium-term development challenges. It is intended for a wide audience, including policymakers, business leaders, financial market participants, and the community of analysts and professionals engaged in Indonesia’s evolving economy. The IEQ is a product of the World Bank’s Jakarta office and receives editorial and strategic guidance from an editorial board chaired by Rodrigo Chaves, Country Director for Indonesia. The report is compiled by the Macroeconomics and Fiscal Management Global Practice team, under the guidance of Shubham Chaudhuri, Practice Manager, and Ndiame Diop, Lead Economist. Led by Alex Sienaert, Country Economist, and with responsibility for Part A, editing and production, the core project team comprises Arsianti, Magda Adriani, Masyita Crystallin, Fitria Fitrani, Ahya Ihsan, Yue Man Lee, Elitza Mileva, Bede Moore and Violeta Vulovic, with additional editing by Peter Milne. Administrative support is provided by Titi Ananto. Dissemination is organized by Indra Irnawan, Jerry Kurniawan, Desy Mutialim and Nugroho Sunjoyo, under the guidance of Dini Djalal. This edition of the IEQ also includes contributions from Ekaterine Vashakmadze (Part A, international context), Monica Wihardja, Taufik Indrakesuma, Matthew Wai Poi and Edgar Janz with guidance from Vivi Alatas (Part B.1, rice prices), Della Temenggung and Connor Spreng (Part B.2, OSS), Elitza Mileva (Part B.3, potential GDP growth), and Arvind Nair and Yue Man Lee (Part C, natural resource sector). Key data and input were received from Dwi Endah Abriningrum, Dani Nugroho, David Elmaleh, Cindy Paladines, Michaelino Mervisiano, Imam Setiawan, Daim Sukriyah and Ikuko Uochi. The report also benefited from discussions with and in-depth comments from Mohamad Ikhsan, and David Nellor (Australia Indonesia Partnership for Economic Governance). This report is a product of the staff of the International Bank for Reconstruction and Development/The World Bank, supported by funding from the Australian government under the Support for Enhanced Macroeconomic and Fiscal Policy Analysis (SEMEFPA) program. The findings, interpretations, and conclusions expressed in this report do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent, or the Australian government. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The cover photograph is copyright of Bimo Nurendro. The remaining photographs are taken by Puguh Imanto and Arsianti and are copyright of the World Bank. All rights reserved.
For more World Bank analysis of Indonesia’s economy: For information about the World Bank and its activities in Indonesia, please visit www.worldbank.org/id. To receive the IEQ and related publications by email, please email [email protected]
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Table of contents EXECUTIVE SUMMARY: HIGH EXPECTATIONS ...........................................................