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 narrow later in 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% of GDP in the forecast period. The income account will remain in deficit, owing to the repatriation of earnings by foreign-owned companies.

Monthly review

• In May Mr Yudhoyono was embarrassed by the findings of an opinion poll which showed that he was less popular than Soeharto, a former president who ruled Indonesia as a dictator from 1965 to 1998.
• A corruption scandal focused on the construction of athletes' dormitories in Palembang for the forthcoming Southeast Asian Games has resulted in the sacking of the treasurer of Mr Yudhoyono's Democratic Party (PD).
• The UN High Commissioner for Human Rights has expressed concerns over rising religious violence in Indonesia and has urged the government to accept a visit from the UN's special rapporteur on religious freedom.
• In May Mr Yudhoyono signed a much-anticipated moratorium on forest conversion. This was an important milestone in the struggle to reform Indonesia's deeply corrupt forestry sector.
• The Ministry of Finance submitted its basic economic assumptions for 2012 to the House of People's Representatives (DPR, the legislature) in May. The assumptions paint an optimistic picture of the economy.
• Prospects for car sales have been clouded by the earthquake and tsunami disaster that struck Japan in March, which has caused severe disruption to production of components and also to supply chains.