The government of Indonesia plans to introduce a 15 percent anti-dumping duty on steel to prevent massive steel imports thus supporting Indonesia’s domestic steel industry. Indonesia is not the first country to introduce anti-dumping import duties on steel products. China imposed anti-dumping duties on certain stainless steel tubes from Japan and the European Union (thereby increasing the global steel oversupply), while Malaysia imposed anti-dumping duties on hot rolled coils imported from China and Indonesia.

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Indonesia’s Chief Economics Minister Sofyan Djalil said that Indonesia will further reduce prices of low-octane gasoline and subsidized diesel at the end of this month as global oil prices continue to fall (touching five-year lows). On 1 January 2015, the Indonesian government had already removed subsidy for widely-used low-octane gasoline (premium), while a fixed subsidy scheme was introduced for diesel (solar) meaning that the government now provides a subsidy of IDR 1,000 (USD $0.08) per liter of diesel.

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The new cabinet of Indonesia, which had been announced by Indonesian President Joko Widodo on Sunday (27/10), will be inaugurated this morning at 10:30 am local Jakarta time zone, followed by a plenary cabinet meeting at 14:00 pm. Reactions from people and markets are mixed. Although it is positive that the cabinet includes several professional technocrats (contrary to political party politicians) on key positions such as the Finance Ministry and the Coordinating Ministry for Economics, there is criticism on the ‘reformist nature’ of the cabinet.

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After a week of speculation, Indonesian President Joko Widodo presented the composition of his working cabinet on Sunday afternoon (26/10). The final composition took some time as 8 of Widodo’s ministerial candidates failed to pass the screening of the country’s Corruption Eradication Commission (KPK) and the Financial Transaction Reports and Analysis Center (PPATK). Although Widodo was not forced to have his candidates screened by these two institutions, he wanted to make sure that they have clean records in terms of corruption.

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Public spending on infrastructure development in Indonesia is not optimal. Sofyan Djalil, Indonesia's National Development Planning Minister as well as Head of the National Development Planning Agency (Bappenas), says immature and non-integrated planning between ministries and other government agencies as well as between the central and regional governments cause inefficient and non-optimal infrastructure spending. Non-optimal infrastructure development implies that Indonesia's overall economic growth as well as social development cannot achieve its full potential.

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China has won a contract to build a high-speed railway between Indonesia's capital city of Jakarta and Bandung (West Java), beating Japan along the way. Earlier this month, the Indonesian government unexpectedly decided to decline proposals from Japan and China for the construction of a multi-billion high-speed railway between both cities as these proposals included financial assistance or a guarantee from the Indonesian government. Moreover, Indonesia considered a super-fast train unnecessary on the relatively short route (150 km).

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Amid continued slowing economic growth unemployment in Indonesia increased in February 2015. On Tuesday (05/05), Statistics Indonesia announced that the country’s unemployment rate rose to 5.81 percent, up from 5.70 percent in February last year. However, compared to August 2014 - when unemployment was recorded at 5.94 percent - relative unemployment in Indonesia actually declined. Statistics Indonesia releases data on unemployment twice per year covering the unemployment rate in the months February and August.

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Indonesian Minister for Economic Affairs, Sofyan Djalil, announced an economic policy package that is to be implement to boost the Indonesian economy, particularly in a move to improve the country’s current account balance, which is the broadest measurement of foreign exchange flows, including trade, services, interest payments and remittances. One new policy change involves visa-free travel into Indonesia. Starting from April 2015, Indonesia will allow foreigners from an additional 30 countries to enter Indonesia without a visa.

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Indonesian stocks hit a record high on Thursday (22/01). Most emerging Asian stocks and currencies strengthened on increased speculation that the European Central Bank (ECB) is to launch a massive bond-buying program (which was confirmed later on the day after Asian markets had closed), a move aimed at boosting inflation in the Eurozone and which puts pressure on euro-denominated assets. The euro had depreciated 1.67 percent against the US dollar by 11:20 ET on Thursday based on Bloomberg data.

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The Governor of Indonesia’s central bank, Agus Martowardojo, said that he expects inflation to accelerate to 6.1 percent year-on-year (y/y) in November 2014, significantly up from 4.83 percent y/y in the previous month. Accelerated inflation is caused by the multiplier effect triggered by the recent subsidized fuel price hike in Southeast Asia’s largest economy. On 18 November 2014, the government introduced higher prices for subsidized fuels in a bid to reallocate public spending from fuel consumption to structural development.

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