Indonesia Economic Quarterly, March 2014 : Investment in Flux

World Bank

Indonesia Economic Quarterly, March 2014 : Investment in Flux

Autores

World Bank

Editor

Washington, DC

Descripción

Indonesia's economy continues to adjust to weaker terms of trade and tighter external financing conditions, with the composition of growth tilting more towards net exports, and economic growth slowing moderately. While this shift is positive for macroeconomic stability, it has to date been based primarily on tighter monetary policy and the depreciation of the Rupiah in 2013, the effects of which are continuing to play out. To further reduce Indonesia's vulnerability to external shocks, to minimize the risks of a more marked cyclical slowdown in growth, and to convert the near-term macro adjustment into strong, sustained growth over the longer term, further progress on long-standing policy priorities is warranted. Progress in three key areas can support both near-term macro stability and Indonesia's long-term economic prospects. First, there is a need to support domestic and foreign investor confidence. Recent policy and regulatory developments, including the partial ban on mineral exports, have increased uncertainty, may weigh on investment across the economy, and compound the usual difficulty of predicting policy ahead of elections. Given rising fiscal pressures from slower revenue growth and higher fuel subsidy costs, the second priority is to broaden the revenue base and improve the quality of spending, notably by reducing energy subsidy expenditure. These measures would also increase available fiscal space for more equitable, pro-growth spending. Third, credible progress is needed on addressing structural impediments to stronger and more inclusive growth, namely infrastructure and worker skills gaps, and factor and product market constraints. The policy environment is naturally constrained ahead of legislative elections in April and the presidential election in July. However, in light of ongoing economic risks and Indonesia's ambitious development agenda, laying the groundwork for future reforms, minimizing policy uncertainty, and making continued reform progress in some areas, should remain a priority.

Palabras clave

ACCOUNTING, ADVERSE EFFECTS, AGRICULTURE, ARREARS, BALANCE OF PAYMENTS, BALANCE SHEETS, BANK ASSETS, BANK LENDING, BANKING SECTOR, BANKING SECTOR ASSETS, BANKING SYSTEM, BASIS POINTS, BENCHMARK, BILL, BOND, BOND YIELDS, BONDS, BORROWING COSTS, BUDGET DEFICIT, CAPITAL ADEQUACY, CAPITAL GOODS, CAPITAL GOODS IMPORTS, CAPITAL INFLOWS, CAPITAL INVESTMENT, CAPITAL OUTFLOWS, COMMERCIAL BANK, COMMERCIAL BANK CREDIT, COMMERCIAL BANK LENDING, COMMERCIAL BANKS, COMMODITY PRICE, COMMODITY PRICES, CONSUMER CREDIT, CONSUMER GOODS, CONSUMER PRICE INDEX, CONSUMERS, CONSUMPTION EXPENDITURE, CORE INFLATION, CREDIT GROWTH, CURRENCY DEPRECIATION, CURRENCY HEDGING, CURRENT ACCOUNT, CURRENT ACCOUNT BALANCE, CURRENT ACCOUNT DEFICIT, DEBT, DEBT ISSUANCE, DEBT REPAYMENTS, DECLINE IN INVESTMENT, DEFICITS, DEFLATION, DEPENDENCY RATIO, DEPOSIT, DEPOSITS, DIRECT INVESTMENT, DISBURSEMENT, DISBURSEMENTS, DOMESTIC BONDS, DOMESTIC CURRENCY, DOMESTIC DEMAND, DOMESTIC EQUITIES, DOMESTIC GOVERNMENT BONDS, ECONOMIC ASSUMPTIONS, ECONOMIC CONDITIONS, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC PERFORMANCE, ECONOMIC RISKS, EMERGING ECONOMIES, EMERGING ECONOMY, EMERGING MARKET, EMERGING MARKET ECONOMIES, EMERGING MARKET ECONOMY, EQUIPMENT, EQUITY INDICES, EQUITY MARKETS, EXCHANGE RATE, EXCHANGE RATES, EXPENDITURE, EXPENDITURES, EXPORT GROWTH, EXPORT VOLUMES, EXPORTERS, EXPORTS, EXTERNAL BALANCE, EXTERNAL BALANCES, EXTERNAL DEBT, EXTERNAL DEMAND, EXTERNAL FINANCING, EXTERNAL SHOCKS, FEDERAL RESERVE, FINANCIAL ASSETS, FINANCIAL CRISIS, FINANCIAL MARKET, FINANCIAL MARKET PARTICIPANTS, FINANCIAL MARKETS, FINANCING REQUIREMENTS, FISCAL BURDEN, FISCAL DEFICIT, FISCAL POLICY, FISCAL REFORMS, FIXED CAPITAL, FIXED INVESTMENT, FLEXIBLE EXCHANGE RATE, FOREIGN CAPITAL, FOREIGN CURRENCY, FOREIGN EXCHANGE, FOREIGN EXCHANGE MARKET, FOREIGN EXCHANGE RESERVE, FOREIGN FINANCING, FOREIGN INVESTOR, FOREIGN INVESTORS, GDP DEFLATOR, GLOBAL ECONOMY, GOVERNMENT BOND, GOVERNMENT BOND YIELDS, GOVERNMENT BONDS, GOVERNMENT DEBT, GOVERNMENT SPENDING, GROSS DOMESTIC PRODUCT, GROSS FIXED CAPITAL FORMATION, GROWTH RATE, IMPORT, IMPORT COMPRESSION, IMPORT COSTS, IMPORT DEMAND, IMPORT GROWTH, IMPORTS, INCOME, INCOME TAX, INCOME TAXES, INDEXATION, INFLATION, INFLATIONARY PRESSURES, INFRASTRUCTURE DEVELOPMENT, INSTITUTIONAL CAPACITY, INTEREST RATE, INTEREST RATES, INTERNATIONAL BANK, INTERNATIONAL DEVELOPMENTS, INTERNATIONAL MARKET, INVESTING, INVESTMENT CLIMATE, INVESTMENT FLOWS, INVESTMENT INFLOWS, INVESTMENT POLICY, INVESTOR CONFIDENCE, LABOR FORCE, LEADING INDICATORS, LIABILITY, LIQUIDITY, LIQUIDITY RISKS, LOAN, LOCAL CURRENCY, MACROECONOMIC ADJUSTMENT, MACROECONOMIC ADJUSTMENTS, MACROECONOMIC INDICATORS, MACROECONOMIC MANAGEMENT, MACROECONOMIC STABILITY, MACROECONOMIC STABILIZATION, MARKET CONDITIONS, MARKET CONFIDENCE, MARKET CONSTRAINTS, MARKET LIQUIDITY, MARKET PRICES, MARKET TRADING, MATURITY, MONETARY POLICY, MONEY MARKET, MONEY MARKET RATES, NET EXPORTS, NOMINAL INTEREST RATE, NON-PERFORMING LOAN, OIL PRICE, OIL PRICES, OPPORTUNITY COSTS, OUTSTANDING CREDIT, OUTTURN, PORTFOLIO, PORTFOLIO INFLOWS, PORTFOLIO INVESTMENT, POTENTIAL OUTPUT, POVERTY REDUCTION, PRICE INCREASE, PRICE INCREASES, PRICE TRANSPARENCY, PRICE VOLATILITY, PRIVATE BORROWING, PRIVATE CONSUMPTION, PRODUCTIVITY GROWTH, REAL CONSUMPTION, REAL EFFECTIVE EXCHANGE RATE, REAL GDP, REAL IMPORTS, REAL INTEREST, REAL INTEREST RATES, REPO, RESERVE REQUIREMENT, RESERVES, RETURN, RISK FACTOR, RISK PROFILE, SHORT-TERM DEBT, SHORT-TERM EXTERNAL DEBT, SHORTFALLS, SLOWDOWN, STOCKS, SUPPLY-SIDE, SURPLUS, SUSTAINABLE GROWTH RATE, SWAP, TAX, TAX COLLECTION, TAX REVENUES, TRADE BALANCE, TRADE IMPACT, TRADE IMPACTS, TRADING, TRADING PARTNER, UNCERTAINTY, UNEMPLOYMENT, UNEMPLOYMENT RATE, UPWARD PRESSURE, WEALTH, WITHDRAWAL, WORKING CAPITAL