Indonesia: Ongoing depreciation and outflow of foreign exchange reserves raise concern

GDP growth eased slightly in H1 2013 but will remain robust. Appropriate monetary policy in recent years. Elevated inflation due to fuel subsidy cuts.

Still rapid credit growth lthough the depreciation of IDR accelerates in the wake of emerging market sell-off in mid-2013.

Solid public finances and the current account will remain in moderate deficit.

External debt burden is manageable. The continued decline in foreign exchange (FX) reserves is worrisome.