Outlook for 2011-15

• The president, Susilo Bambang Yudhoyono, has a strong mandate to pursue his reformist policy agenda, having won re-election comfortably in July 2009, but his reforms are encountering resistance from vested interests.
• Indonesia will elect a new president to succeed Mr Yudhoyono in 2014. A requirement of the election law means that the next president is likely to be the nominee of one of the country's three main political parties.
• Bank Indonesia (BI, the central bank) will tighten monetary policy in 2011-12 by gradually raising interest rates.
• The fiscal deficit will widen in 2011, to the equivalent of 1.2% of GDP, but it will then narrow during the remainder of the forecast period, leading to a fall in government debt.
• The Economist Intelligence Unit forecasts that real GDP growth will accelerate to an average of 6.3% a year in the forecast period, driven mainly by private consumption and fixed investment.
• We expect the current account to record an average surplus equivalent to 1.1% of GDP in the forecast period. The income account will stay in deficit, owing to the repatriation of earnings by foreign-owned companies.

Monthly review

• The Chinese premier, Wen Jiabao, signed a series of economic co-operation agreements during an official visit to Indonesia on April 28th-30th. Some Indonesian officials have expressed concern over the relationship with China.
• Proposed revisions to the legislation that established the Anti-Corruption Commission (KPK) threaten to weaken the agency's authority to prosecute graft suspects.
• The finance minister, Agus Martowardojo, has said that high global oil prices may lead to a wider budget deficit this year. Despite higher spending on subsidies, the government recorded a budget surplus in the first quarter.
• Indonesia's economy slowed in the first quarter of 2011. According to the official data agency, Statistics Indonesia (BPS), real GDP expanded by 6.5% year on year, down from the previous quarter's growth of 6.9%.
• Inflation, as measured by the consumer price index, slowed in April to 6.2% year on year, down from 6.7% in March, according to BPS. But core inflation accelerated to 4.6% in that period, from 4.5% in the previous month.
• Despite a fall in the goods surplus, Indonesia's current-account surplus rose to US$1.9bn in the first quarter, equivalent to 1% of GDP, owing to smaller deficits on the services and income accounts, according to BI.