Indonesia's export industries will probably not be back on track in 2014 as global demand has been curbed by a slow global economic recovery. Also, the economy of the 'ASEAN plus five region' (ASEAN member states plus Japan, China, South Korea, Australia and New Zealand) is expected to slow down.

Initially, the government had targeted for economic growth of seven percent in 2014 but this number is still a threshold too high in Indonesia's Reformation period. The threshold reminds us of the authoritarian Suharto period, which was characterized by robust economic growth at the expense of human rights violations and accompanied by vast self-enrichment.

    2007   2008   2009   2010   2011   2012   2013   2014
Indonesia's GDP
(in billion USD)
 364.6  432.1  510.2  539.4  706.6  850.0      -      -
Indonesia's GDP
(annual percent change)
   6.3    6.0    4.6    6.2    6.5    6.2    6.2¹    6.5²

¹ World Bank forecast
² Indonesian Government forecast
Sources: Statistics Indonesia and World Bank

The elections that will be held in 2014 are assumed to support Indonesia's economy as they will lure consumption. The legislative elections will be held on 9 April 2014 and the presidential election in mid-2014.

Besides revising down the country's 2014 GDP forecast, minister of National Development Planning minister Armida Alisjahbana stated that the government targets an inflation rate of about 4.5 percent, a poverty rate of about 10 percent, and an unemployment rate at about 5.5 percent in 2014.

    2008   2009   2010   2011   2012   2013   2014
Inflation
(annual percent change)
   9.8    4.8    5.1    5.4    4.3    5.5¹    4.5¹
Relative Poverty
(percentage of population)
  15.4   14.2   13.3   12.4   11.7   11.0¹   10.0¹
Unemployment
(percentage of labor force)
   8.4    7.9    7.1    6.6    6.1    5.8¹     5.5¹

¹ indicates a government projection
Source: Statistics Indonesia

The government will allocate IDR 47 trillion (USD $4.8 billon) for the eradication of the country's poverty next year. About half of the allocated amount will be used to finance the government's raskin (acronym of beras miskin which means rice for the poor) program.

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