Indonesian economy : Impact of global financial crisis

Abstract

Global financial crisis impact on Indonesia in 2008 is not too heavy in comparison with neighboring countries in ASEAN region. Compared to other ASEAN countries in the region which economic growth dropped to negative during the financial crisis 2008-2009 such as Singapore, Malaysia, Thailand and Philippines, Indonesia is very fortunate because the decline is only from 6.3% in 2007 to 6% in 2010 and 4.6% in 2009. This paper describes the impact of the global financial crisis in Indonesia through three main aspects: (i) economic growth, (ii) price level, government budget and financial market, (iii) the welfare of society that is through poverty level and labor market. The last part of this paper describes the economic challenges facing Indonesia today.