This edition of Indonesia EconomicQuarterly (IEQ) reports on the key developments over thepast three months in Indonesia’s economy, and provides amore in-depth examination of selected economic and policyissues, and analysis of Indonesia’s medium-term developmentchallenges. Global growth was sluggish in the first half ofthe year, driven by weaker than expected growth in advancedeconomies. In addition, China’s growth eased as expected asthe economy continues to rebalance from investment- toconsumption led growth, and as excess industrial capacity isreduced. However, import demand from China was weaker thanexpected. On the upside, the global financial marketvolatility leading up to and in the aftermath of the Brexitreferendum in June has moderated significantly. Lowervolatility in financial markets has contributed to theRupiah’s stabilization against the US Dollar (in line withmost other emerging market currencies). Indonesia’s growthremained resilient in Second Quarter (Q2), partly supportedby government expenditure, and is forecast to pick-upgradually on the back of stronger private investmentsupported by investment climate reforms and credible fiscalpolicy. This resilience stands in contrast to theperformance of several other emerging market commodity exporters.
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