The central bank of Indonesia (Bank Indonesia) released its '2013 Economic Report on Indonesia' earlier this week. This report discusses in great detail both global and domestic economic dynamics as well as policy responses. The year 2013 was a year full of challenges for the Indonesian economy because of changes in global economic conditions (US Federal Reserve tapering), requiring a range of structural policy changes to steer the economy of Indonesia towards a more balanced growth and restored macroeconomic stability.
Governor of Bank Indonesia Agus Martowardojo said "the year 2013 was no easy time for the Indonesian economy. Time and time again, a broad array of challenges put our economic resilience to the test. Global economic conditions that fell short of expectations led to pressure on the Indonesian economy through both the trade and financial channels. The influence of the global economy on Indonesia became yet stronger because the underpinnings of Indonesia’s economic structure lacked the strength to withstand and absorb global shocks. This structural problems included heavy reliance on exports of resource-based products, lack of self-sufficiency in food, energy and technology, and an underdeveloped financial market. This combination of global and domestic conditions had in turn put pressure on the Indonesian economy all the way through the third quarter of 2013, a period marked by rising inflation, widening current account deficit, depreciating rupiah, and the financial market performance."