{
  "title": "Indonesia: Selected Issues",
  "publication": "IMF Staff Country Reports, July 31, 2019",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2019/07/30/indonesia-selected-issues-48536",
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  "summary": "This Selected Issues paper provides an overview of the exchange rate and trade dynamics in Indonesia. Using data on monthly export and import price and volume at the sectoral level, the paper estimates pass-through effects of exchange rate changes to trade price and volume.",
  "sections": [
    {
      "heading": "Overview of the analysis",
      "content": "- Uses data on monthly export and import price and volume at the sectoral level to estimate pass-through effects of exchange rate changes to trade price and volume.\n- Identifies adjustment frictions that depend on the source of the exchange rate fluctuation and the degree of integration in global value chains."
    },
    {
      "heading": "Key findings on pass-through and trade",
      "content": "- Combining price and volume effects, a 10 percent depreciation in the exchange rate is associated with a rise in the goods net-exports of up to 1.6 percent of GDP.\n- Considerable asymmetry and sectoral heterogeneity in pass-throughs of exchange rate on import and export prices.\n- Import prices:\n  - Adjust well to exchange rate fluctuations.\n  - Effects are stronger for appreciation episodes.\n- Export prices:\n  - Price sensitivity to exchange rate shocks is generally lower than for imports.\n  - Sensitivity is concentrated over shorter horizons and during episodes of depreciation."
    },
    {
      "heading": "Implications for the current account",
      "content": "- The price and quantity results imply that exchange rate changes can have significant effects on the current account by affecting movements in net-exports of goods."
    },
    {
      "heading": "Data and methodology highlights",
      "content": "- Sectoral monthly data on export and import prices and volumes were employed to estimate pass-through coefficients and capture heterogeneity across sectors and episodes."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Corporate income tax, Exchange rates, Foreign exchange, Medium term revenue strategy, Revenue administration, Revenue performance assessment, Tax administration core functions, Taxes, Value-added tax\n- Keywords: Corporate income tax, CR, Exchange rates, Global, ISCR, market, market rate, Medium term revenue strategy, monetary policy decision, monetary policy press releases, monetary policy report, pass-through, pass-through coefficient, price, rate, Tax administration core functions, upside risk, Value-added tax\n\nSource: Indonesia: Selected Issues (July 31, 2019).\n\n---\n\n Content in this bundle\n\n- Indonesia: Selected Issues; IMF Country Report No. 19/251; June 17, 2019\n  - Indonesia: Selected Issues; IMF Country Report No. 19/251; June 17, 2019 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Indonesia: Selected Issues; IMF Country Report No. 19/251; June 17, 2019 (PDF){rel=\"external\" type=\"application/pdf\"}"
    }
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    "Published: July 31, 2019",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781513509136.002",
    "Uses data on monthly export and import price and volume at the sectoral level to estimate pass-through effects of exchange rate changes to trade price and volume.",
    "Identifies adjustment frictions that depend on the source of the exchange rate fluctuation and the degree of integration in global value chains.",
    "Combining price and volume effects, a 10 percent depreciation in the exchange rate is associated with a rise in the goods net-exports of up to 1.6 percent of GDP.",
    "Considerable asymmetry and sectoral heterogeneity in pass-throughs of exchange rate on import and export prices.",
    "Import prices:",
    "Export prices:",
    "The price and quantity results imply that exchange rate changes can have significant effects on the current account by affecting movements in net-exports of goods.",
    "Sectoral monthly data on export and import prices and volumes were employed to estimate pass-through coefficients and capture heterogeneity across sectors and episodes.",
    "Subject: Corporate income tax, Exchange rates, Foreign exchange, Medium term revenue strategy, Revenue administration, Revenue performance assessment, Tax administration core functions, Taxes, Value-added tax",
    "Keywords: Corporate income tax, CR, Exchange rates, Global, ISCR, market, market rate, Medium term revenue strategy, monetary policy decision, monetary policy press releases, monetary policy report, pass-through, pass-through coefficient, price, rate, Tax administration core functions, upside risk, Value-added tax",
    "**Indonesia: Selected Issues; IMF Country Report No. 19/251; June 17, 2019**"
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      "title": "Indonesia: Selected Issues; IMF Country Report No. 19/251; June 17, 2019",
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