Survey of recent developments

Abstract

Monthly inflation fell to around zero in October 1998, while the rupiah strengthened considerably. Some recovery of share prices and significant declines in interest rates have given cause for optimism, and early estimates of increases in both poverty and unemployment now appear unjustifiably pessimistic. Although non-oil exports have been growing reasonably well, the plunge in imports reflects the severely depressed economy, and there is little to suggest that recovery is imminent. The private sector is waiting until the political outlook becomes clearer, and continuing outbreaks of violence have further eroded its confidence. The new bankruptcy laws are not working effectively and so a de ..