Indonesia 2014 growth forecast put at 6.8%
The largest economy in ASEAN, Indonesia, is expected to grow between 6.4 per cent and 6.8 per cent in 2014, the country’s central bank said on June 25, marking an upward trend from the 6.1 per cent forecast for 2013.
The growth for 2013, slower than originally expected, is attributed to high inflation and slow recovery in global demand, affecting the country’s exports.
The Bank of Indonesia surprised investors and analysts by raising its benchmark interest rate by 25 basis points to 6 per cent in anticipation of rising inflation expectations.
This move was shortly preceded by a decision to strip fuel subsidies, a politically dangerous tactic that instantly incited street protests.
The resulting increase in fuel by 33 per cent will help to alleviate the massive strain placed on the country’s budget, which came to $20.2 billion in 2013 — nearly 4 per cent of total economic output.
However, in a country where half the population lives on less than $2 a day and is extremely vulnerable to increases in prices of basic goods, the government has taken to offsetting the removal of the subsidy by issuing a $2.8 billion compensation package for the poor.
The largest economy in ASEAN, Indonesia, is expected to grow between 6.4 per cent and 6.8 per cent in 2014, the country’s central bank said on June 25, marking an upward trend from the 6.1 per cent forecast for 2013. The growth for 2013, slower than originally expected, is attributed to high inflation and slow recovery in global demand, affecting the country’s exports. The Bank of Indonesia surprised investors and analysts by raising its benchmark interest rate by 25 basis points to 6 per cent in anticipation of rising inflation expectations. This move was shortly preceded by a decision to...
The largest economy in ASEAN, Indonesia, is expected to grow between 6.4 per cent and 6.8 per cent in 2014, the country’s central bank said on June 25, marking an upward trend from the 6.1 per cent forecast for 2013.
The growth for 2013, slower than originally expected, is attributed to high inflation and slow recovery in global demand, affecting the country’s exports.
The Bank of Indonesia surprised investors and analysts by raising its benchmark interest rate by 25 basis points to 6 per cent in anticipation of rising inflation expectations.
This move was shortly preceded by a decision to strip fuel subsidies, a politically dangerous tactic that instantly incited street protests.
The resulting increase in fuel by 33 per cent will help to alleviate the massive strain placed on the country’s budget, which came to $20.2 billion in 2013 — nearly 4 per cent of total economic output.
However, in a country where half the population lives on less than $2 a day and is extremely vulnerable to increases in prices of basic goods, the government has taken to offsetting the removal of the subsidy by issuing a $2.8 billion compensation package for the poor.
