Only a few months after the Indonesian government had imposed a price cap on mandatory sales of local coal to Indonesia's state-owned electricity company Perusahaan Listrik Negara (PLN) under the domestic market obligation (DMO) scheme, the government now plans to revise this regulation. Coming Tuesday (31/07) a high-level meeting is to take place where decisions will be taken.
5 December 2019 (closed)
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Indonesia Investments' News Columns section contains articles with a detailed analysis regarding topics that have high news value in Indonesia and can be regarded as topics that are capable of influencing Indonesia's investment climate. Most columns published in this section cover subjects related to politics, economics and social matters. By following these publications on a regular basis, one will be apprised of what is happening in Indonesia and - just as important - understand why it is happening.
Traditionally the Indonesian government wants to raise spending on social assistance programs when legislative and presidential elections are around the corner in an attempt to become more popular, hence attract more votes. The government under the leadership of Joko Widodo also plans to use this strategy.
Poverty in Indonesia declined to the lowest level ever in March 2018 (Indonesia's Central Statistics Agency, or BPS, releases poverty figures twice per year, covering the months March and September). Based on the latest data, Indonesia's relative poverty figure fell to 9.82 percent of the total population. Thus, 25.95 million Indonesians are now categorized as poor.
There are doubts whether Indonesia's gross domestic product (GDP) growth can reach 5.2 percent year-on-year (y/y) in full-year 2018 as Indonesia is experiencing a couple of major challenges. Challenges include the global trade war, the fragile rupiah, Bank Indonesia's higher benchmark interest rate, the current account deficit, and political tensions ahead of the 2019 legislative and presidential elections. Currently, Indonesia Investments' forecast for Indonesia's economic growth is set at 5.2 percent (y/y) in 2018.