A More Subdued Second Half

This year's Idul Fitri celebration was noticeably quieter than in past years. The month of Ramadhan is usually a period of increased sales, but businesses were disappointed this year as they recorded tepid sales. Analysts hoped that early August would be the start of an economic recovery for the remainder part of the year, but most are now toning down their 2015 full year growth estimates to at most five percent.

The rupiah continued to weaken, closing this week at Rp13,447 per US dollar. Bank Indonesia is trying to manage the currency's depreciation, reflected by the US$3 billion drop in the country's reserves, which is now at US$108 billion. The Jakarta Composite Index also closed the week at 4.857, below last week's level.

July 28, 2015