Indonesia Economic Quarterly, June 2009 : Weathering the Storm
Indonesia's slowdown has come relatively later and been more moderate than for many countries but the adverse effects of the global economic slowdown are now playing out. Gross Domestic Product (GDP) growth slowed in the fourth quarter of 2008...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/942961468038947051/Indonesia-economic-quarterly-weathering-the-storm http://hdl.handle.net/10986/30834 |
| Summary: | Indonesia's slowdown has come
relatively later and been more moderate than for many
countries but the adverse effects of the global economic
slowdown are now playing out. Gross Domestic Product (GDP)
growth slowed in the fourth quarter of 2008 and into the
first quarter of 2009, to 4.4 percent year-on-year, from 6.4
percent in the year to the third quarter. For 2008 as a
whole the Indonesian economy expanded by 6.1 percent, only
slightly below 2007's 6.3 percent pace. Nevertheless,
all sectors of the economy were impacted during the period
of peak turbulence in global financial markets in late 2008.
Into the first quarter of 2009 externally focused sectors
continued to be especially impacted by the global slowdown,
while domestic demand rebounded on buoyant consumer
confidence, stable retail prices and renewed investor
confidence. Agriculture was a notably strong sector, with
agricultural production increasing by 4.8 percent in 2008,
the fastest growth since 1992. While agriculture now
accounts for 14.4 percent of total output it continues to
provide most or all of the support for 42 percent of
households. Although Indonesia's direct exposure to
troubled American and European-domiciled banks is limited,
Indonesian bankers became more conservative in line with
tightening global financial conditions. Far fewer new loans
are being approved, and anecdotal reports suggest that some
new customers have had difficulty accessing credit. While
inter-bank lending has been improving and there is
sufficient overall rupiah liquidity in the system, it is not
evenly distributed with larger banks typically liquid and
smaller banks facing problems. Nevertheless banking sector
indicators continue to be relatively robust, and the
nation's largest banks reported higher net profits in
the first quarter of 2009. |
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