Economic Outlook 2014: Prospects and Challenges

How to Cite

Friawan, D. (2024). Economic Outlook 2014: Prospects and Challenges. Indonesian Quarterly, 41(4). Retrieved from


Looking ahead, the outlook in 2014 is expected to see sizeable downside risks, coming from both domestic and external sides. It is estimated that the economic growth in 2014 would remain under 6.0 percent as the country's economy is much more impacted by tighter economic condition, lower commodity prices, as well as uncertainty in financial market and regulatory regime in the run-up to the 2014 election, offsetting the positive effects of global economic recovery and rising spending related national election. Inflation rate, meanwhile, is projected to ease and return to the Bank Indonesia's target band of 4.5±1 percent in 2014, as the effect of the effect of the fuel price increases may have subsided and the aggregate demand growth slows. However, the recent depreciation in rupiah, the minimum wage hikes for next year, and the second and third-round effects from the increase in fuel prices and electricity billing rates may give further inflationary pressures to the outlook. As for external side, a modest narrowing in current account deficits is expected to be help by slowing imports, as investment growth continues moderate in 2014.