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Archive for July, 2009

World capital markets show the same trend in late four months, stock price index rallied since March 2009. Start with Dow Jones Industrial Average (DJIA), then Nikkei of Tokyo and other stock market around the world including Jakarta Stock Exchange (JSE) follow suit.

The trend thus followed by oil price even with more moderate ways. Oil price is back to punch through US$ 70 a barrel, the same price level as in the mid 2006 and 2007. Stocks and oil price movement seems like sending message that the worst of recent world economic crisis has been passed, the capital market has already leave the most bottom of the curve and welcoming the recovery.

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Susilo Bambang Yudhoyono (SBY) campaign team always boasted economic achievement during SBY led administration which successfuly reduce foreign debt including paid remaining $ 7.8 billion debt from International Monetary Fund (IMF). In SBY administration, foreign debt was massively replaced by domestic debt by issuing government bond either in rupiah or in foreign currency such as US dollar or Japanese Yen (samurai bond).

They acknowledged the total debt was grew, but they assure it was secure as the debt to GDP (gross domestic product) ratio was significantly smaller than in previous years. In 2004, the first year of SBY administration, the debt to GDP ratio was still 57 pct and in 2008 reduced to 33 pct.
(www.sbypresidenku.com)

National Development Planning Agency (Bappenas) officers when asked about why we compare government debt to GDP, they will always tellĀ  that it was a custom around the world. They just followed the so called global standard.

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