The Indonesian economic quarterlyreports on and synthesizes the past three months' keydevelopments in Indonesia's economy. It places them ina longer-term and global context, and assesses theimplications of these developments and other changes inpolicy for the outlook for Indonesia's economic andsocial welfare. Its coverage ranges from the macro-economyto financial markets to indicators of human welfare anddevelopment. It is intended for a wide audience, includingpolicy makers, business leaders, financial marketparticipants, and the community of analysts andprofessionals engaged in Indonesia's evolving economy.Indonesia's economy continues to record robust growth,in contrast with the volatility and uncertaintycharacterizing major economies globally. The robustness ofgrowth has allowed the policy focus to shift from near-termuncertainty towards achieving the investments and reformrequired to achieve sustained and strong growth over thelonger-term. Meeting the Government's target of over 7percent growth by 2014 requires strong rises in investment,particularly in infrastructure, and in skills andproductivity. Quarterly output accelerated in Q2, resultingin year-on-year growth of 6.2 percent, the highest since theonset of the global economic crisis two years earlier.Domestic demand, particularly private consumption, underpinsthe growth performance and has been associated with risingimports, particularly for investment and intermediate goods.Slow disbursement of government expenditures continue to actas a drag on growth, but less so than in Q1.Indonesia's trading partners also recorded strongergrowth than expected, although the overall contribution ofnet external demand to growth was negative in Q2.Correspondingly, domestic-oriented sectors outperformedexternally-oriented sectors.
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