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 seek to "normalise" interest rates by gradually tightening monetary policy.
• The fiscal deficit will widen in 2011, to the equivalent of 1.3% of GDP, but it will then narrow during the remainder of the forecast period, owing to a rise in revenue.
• 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 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

• The fallout from the conviction of a tax official, Gayus Tambunan, on bribery charges has deepened divisions within the ruling coalition, with one party, Golkar, now even more likely to resist reformist policy initiatives.
• An ugly incident of orchestrated violence against members of an Islamic sect, the Ahmadiyah, in February has heightened concerns about rising intolerance and the government's weakening commitment to religious pluralism.
• The government has indicated that it will postpone indefinitely its planned restriction of subsidised fuel supplies, owing to spiralling oil prices and rapid domestic inflation.
• According to Statistics Indonesia (BPS), strong economic growth of 6.1% in 2010 pushed GDP per head above US$3,000, the mark at which a country is officially accorded middle-income status by the World Bank.
• The country's largest commercial bank, Bank Mandiri, raised Rp11.7trn (US$1.3bn) through a rights issue that closed in mid-February, in what was the largest such issue yet by an Indonesian bank.
• Following a rise in policy interest rates in February, the rupiah strengthened to its highest level since June 2007, at around Rp8,800:US$1.