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 proceed with a policy of "normalising" interest rates by gradually tightening policy.
• The fiscal deficit will widen in 2011 to 1.3% of GDP, but it will then narrow during the remainder of the forecast period owing partly to the inability of the civil service to utilise fully the sums allocated to it for capital expenditure.
• 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 annual surplus equivalent to just under 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

• A court in the capital, Jakarta, has sentenced a low-level tax official, Gayus Tambunan, to seven years in prison for bribery. Mr Tambunan's case had exposed egregious examples of official corruption.
• In late January Mr Yudhoyono made a three-day state visit to India, strengthening ties between two of the leading members of the G20 group of the world's major economies.
• The central bank has raised interest rates for the first time since late 2008. On February 4th BI's governors increased the policy rate, the BI rate, by 25 basis points to 6.75%, the highest level since mid-2009.
• The government has suspended import duties on a range of foodstuffs, while the state procurement agency, Bulog, has replenished its stocks of rice, in an attempt to contain fast-rising food prices.
• Indonesia's economy grew at the fastest pace in six years in the fourth quarter of 2010, with real GDP expanding by 6.9% year on year, according to Statistics Indonesia (BPS). For the year as a whole the economy grew by 6.1%.
• In January the rate of inflation accelerated to the fastest pace in 21 months, with consumer prices rising by 7% year on year, according to BPS.