Rupiah: On a downward trend for more than two years, the
rupiah's exchange value dropped below 12,000 to the US dollar in November 2013,
making it the year's worst performer among Asian currencies. The driving forces
behind the Rupiah's depreciation to a four-year low were the worsening trade balance
and asset sales by global portfolio investors fearing that the US Federal
Reserve would soon begin to reduce quantitative easing. The weaker rupiah in
turn stoked imported inflation by driving up the domestic cost of imported
goods and materials. The current account deficit reinforced negative sentiment
about Indonesia's currency to the extent that traders appeared to disregard
repeated rate hikes and other countermeasures taken by the central bank.
Approaching the end of 2013 however, a growing number of experts opined that
the devaluation no longer fairly reflected the economic fundamentals, which
gives rise to hope that the currency might regain some strength in 2013. That
said, the government appears quite willing to accept a lower Rupiah as it seeks
to bolster exports; it is therefore unlikely that the currency will return to
its 2011 strength any time soon.
GDP: While still strong by global comparison,
Indonesia's economy has gradually slowed over the past two years. By the third
quarter of 2013, annual GDP growth had declined to 5.6%, down from 6.5% in
2011. The slowdown was at first largely owed to lower global prices for key
Indonesian export commodities such as thermal coal, natural rubber, gold and
crude palm oil, and more recently also to slowing investment and consumption.
Net exports are set to remain subdued going into 2014 amid large stockpiles of
rubber and coal in China. Investors will likely remain cautious ahead of
presidential elections in July, while household spending – the core pillar of
Indonesia's economy – is under the cosh as consumers fret about inflation. If
downward pressure on the Rupiah persists, Bank Indonesia (BI) may be compelled
to raise interest rates further in early 2014, which could hurt investment and
consumption in the short run. On the bright side, public spending is set to
buoy GDP in 2014, as the state budget plan foresees an increase of 6.7% over
2013, largely to boost infrastructure development. The second half of the year
could see brighter prospects for both investment and household spending, as
inflation is expected to come back down which would allow BI to relax its monetary
policy. Assuming the world economy continues to strengthen, so should global
commodity prices and hence Indonesian exports.
My opinion about this articel is government
should be wise in managing the financial and economic conditions in Indonesia. lack
of government attention as well as many government officials are only concerned
with personal interests, make the economy worse off Indonesia
My suggestion about this articel is
let us at the same
evoke Indonesian economy and concerned about the future of our country, let's
do away with the culture of corruption in Indonesia and at the same let us
awaken the Indonesian economy for a better future
5W + 1 H
1. What
happened to the economy of Indonesia?
the
rupiah's exchange value dropped below 12,000 to the US dollar
2. Who
is responsible for the decline in the rupiah?
because
the government does not quickly take a policy
3. When
the rupiah exchange value dropped below 12.000 to the US dollar/
in
November 2013
4. Where
this problem happen?
In
indonesia
5.Why
this problem happen?
because
responsibility of the governnment does not quickly and Government is too
complacent with the situation before
6. How
can we do with problem like this
let
us at the same evoke Indonesian economy and concerned about the future of our
country, let's do away with the culture of corruption in Indonesia and at
the same let us awaken the Indonesian economy for a better future
