Indonesia Economic Quarterly, September 2009 : Clearing Skies
In the first half of 2009, Indonesia's economy has established a solid recovery from late last year. Quarterly growth has accelerated since the start of 2009, after stalling in the final quarter of 2008, although the year-on-year growth rate h...
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| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/101861468044149041/Indonesia-economic-quarterly-clearing-skies http://hdl.handle.net/10986/30835 |
| Summary: | In the first half of 2009,
Indonesia's economy has established a solid recovery
from late last year. Quarterly growth has accelerated since
the start of 2009, after stalling in the final quarter of
2008, although the year-on-year growth rate has continued to
slow, recording 4.0 per cent in the year to Q2. This trend
of a gradual recovery is projected to continue into 2011.
Indonesia's recovery coincides with an improved
external environment. Q2 gross domestic product (GDP)
outcomes across its major export destinations were better
than expected and most trading partner's exited
recession by mid-year. International prices of many of
Indonesia's exports have recovered much of their late
2008 falls. These developments have supported
Indonesia's economy, with exports recovering faster
than imports. Domestic consumption continued to contribute
strongly to growth in the second quarter. In the first
quarter, large amounts of spending by campaign teams for the
parliamentary election lifted private consumption.
Indonesia's financial markets have continued to
strengthen through Q2, generally by more than markets
elsewhere in the region. The rupiah has continued to
appreciate against the weakening USD, although at a slowing
rate, and stabilized around 10,000 per USD by early
September. The stock market also performed strongly in Q2,
rising over 20 per cent from late May to early September. By
mid-June, yields on sovereign rupiah bonds had returned to
early 2008 levels, while the spread on Indonesian government
USD bonds had the global emerging market average. From late
June to September, local currency bond yields have remained
broadly stable, while spreads on USD bonds have fallen
another percentage point. These improved market conditions
have allowed the government to continue financing its budget
through the bond market, accessing funds for longer terms
and at lower yields. |
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