Survey of recent developments

Mari Elka Pangestu, Manggi Habir

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)

Abstract

All the macro economic indicators suggest that the recovery of 1988 continued in 1989 and that the upward trend will be maintained this year. GDP growth is expected to continue to accelerate, with non-oil exports and domestic demand as the twin sources of growth. The budgetary outlook is also favourable, with increases in oil revenues and non-oil tax receipts. Higher oil prices have also contributed to the improvement in the balance of payments. A slowdown in non-oil exports and higher import growth have prevented a rapid decline in the current account deficit, but increased investment in both export industries and the domestic economy should ensure continued growth in non-oil exports and greater import substitution. One year after the financial and capital market deregulation, it is clear that rapid growth has occurred in response to new institutions and products and a higher degree of competition. However, the Central Bank needs to play a closer supervisory role in certain areas. While the macro perspective yields an optimistic picture, concern with distribution has been reflected in several recent policy initiatives which may affect the investment climate. The equity objective certainly needs to be addressed, but more thought must be given to appropriate policy instruments if Indonesia is to move closer to the goal of a just and prosperous society.

Original languageEnglish
Pages (from-to)3-36
Number of pages34
JournalBulletin of Indonesian Economic Studies
Volume26
Issue number1
DOIs
Publication statusPublished - 1 Apr 1990

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