Indonesia received a package of good news this week. First, the government announced a prudent budget that laid down the foundations for strong economic growth in the years to come. A Rp 61.3 trillion ($6.2 billion) stimulus package and increased spending on infrastructure and education in 2010 are all welcome steps by President Susilo Bambang Yudhoyono. The president also announced stronger support for the private sector, thus preventing layoffs, stabilizing prices and maintaining consumer purchasing power. These are the building blocks for sustained and robust economic growth. His words and promises received market endorsement as the rupiah strengthened against the dollar to its highest level in recent months, while consumer confidence rose to its highest level in five years according to a recent central bank survey. The survey showed that the consumer confidence index rose to 115.4 in July, up from 109.1 in June. The latest figure is the highest since it hit 119.1 in December 2004. A reading above 100 means more consumers are optimistic than pessimistic. The rupiah is the best performer this year among Asia’s 10 most-traded currencies outside of Japan, having posted a 10.4 percent advance versus the dollar. The currency’s current level is still “good” for business, and it may gain further. These are all positive indicators of an improving economic, social and political climate.
Source: TheJakartaGlobe, p.Section B, 4 August 09
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