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IMF Country Report No. 15/75

INDONESIA

SELECTED ISSUES

March 2015

This Selected Issues paper on Indonesia was prepared by a staff team of the International Monetary Fund. It is based on the information available at the time it was completed on February 23, 2015.

Copies of this report are available to the public from

International Monetary Fund • Publication Services

P.O. Box 92780 • Washington, D.C. 20090

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International Monetary Fund

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©2015 International Monetary Fund

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INDONESIA

SELECTED ISSUES

February 23, 2015

Approved By

Asia and Pacific Department

Prepared By Seng Guan Toh (APD), Masahiro Nozaki (FAD), and Lawrence Dwight (SPR)

Contents

  • THE IMPACT OF MAJOR COMMODITIES ON THE CORPORATE SECTOR AND BANKING SYSTEM

  • A. Introduction

  • B. Recent Trends

  • C. Impact on Corporate Sector

  • D. Impact on Banking System

  • E. Near- to Medium-Term Outlook for the Commodities Sector

  • FIGURES

  • 1. Recent Trends in the Commodities Sector

  • 2. Export Destinations for Major Commodities

  • 3. Exports, Revenues, and Profits by Sector

  • 4. Debt Indicators for the Commodities Sectors

  • 5. The Banking System and Commodities Sector

  • 6. Global Outlook

  • TABLES

  • 1. Changes in Export Receipts

  • 2. Drivers of Revenues and Profits, 2008–13

  • MANAGING FISCAL RISKS IN INDONESIA

  • A. Introduction and Main Observations

  • B. General Government Fiscal Position and Debt Sustainability

  • C. Nonfinancial State-Owned Enterprises

  • D. Health and Pension Spending

  • FIGURES

  • 1. Selected Emerging Market Economies: Public Debt Profile, 2014

  • 2. Contingent Liability Shock

  • 3. Government Debt and Foreign Investors, 2009-14

  • 4. Assets of Nonfinancial SOEs, 2013

  • 5. Financial Indicators of Nonfinancial SOEs, 2009-13

  • 6. Selected Emerging Market Economies: Public Health and Pension Spending, 2010-12

  • 7. Demographic Prospects and Public Health and Pension Spending, 2010-50

  • TABLES

  • 1. General Government Debt, 2008-2013

  • 2. Central Government Operations, 2014-15

  • References

  • RECENT DEVELOPMENTS IN BANKING SYSTEM LIQUIDITY

  • A. Introduction

  • B. Characteristics of Banking System Liquidity in Indonesia

  • C. Recent Trends in Bank Liquidity Conditions

  • D. Role of Policy Actions

  • E. Near-Term Prospects and Risks

  • F. Implications for the Monetary Transmission Mechanism in the Current Environment

  • FIGURES

  • 1. Banking System Liquid Assets and Concentration

  • 2. Current and Saving Accounts, 2013

  • 3. Loan Versus Deposit Growth

  • 4. Contribution to Customer Deposit Growth

  • 5. Selected ASEAN Countries: Loan-to-Deposit Ratios

  • 6. Bank Indonesia’s Liquidity Absorption by Instrument

  • 7. Monetary Aggregates and Loan-to-Deposit Ratios

  • 8. Loan-to-Deposit Ratios by Bank Size

  • 9. Funding, Deposit and Lending Rates, and Interest Margins

  • 10. Policy and Interbank Rates and Deposit Facility

  • 11. Foreign Ownership Share of Rupiah Government Bonds

  • References

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Indonesia: Selected Issues
Author:
International Monetary Fund. Asia and Pacific Dept