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• February-2023: Lower Financing Growth Amid High Interest Rate Environment
  PEFINDO views the outlook for the multi-finance company industry as stable in the near to medium term, supported by the national economic recovery stimulating the industry's growth going forward, especially after the Government lifted the Restriction on Community Activities (PPKM) at the end of December 2022. In addition, we view that the enactment of the second booster vaccine will continue to keep the Covid positive case rate at a manageable level. However, we view the trend of rising interest rates to become the main challenge, and accordingly we expect the multi-finance companies’ net service assets growth will be lower this year. With the majority of industry's funding coming from external including banks and debt issuances, we view industry will experience pressure from the rising cost of funds, which will also impact the growth of financing portfolios. As of December 2022, net service assets were recorded at IDR581.8 trillion or grew 16.4% YoY compared to 2021 receivables of IDR500,0 trillion. Going forward, we expect growth to be lower at 7%-9%. In terms of contribution, automotive financing will remain the main contributor of 60%-70% of total industry receivables. In terms of financial performance, high cost of funds may put additional pressure to multi-finance companies' net interest margin. In addition, we expect provision expenses to be stable with no potential substantial increment compared to the pandemic period. More detail ...
• December-2022: Stable Outlook for Domestic Pulp and Paper Industry
  PEFINDO is of the view that the outlook of the pulp and paper industry in Indonesia is stable with the risk profile of moderately high. Our view is attributable to relatively strong demand of pulp and paper products in the near to medium term, while additional supply will come into effect in the medium term. The demand is buoyed by the growing population and the change of lifestyle to online shopping with the rise of food and goods delivery, albeit with fears of global recession that may decelerate the global demand growth. More detail ...
• October-2022: General Insurance Outlook: Gradual Growth amid Economic Recovery after Pandemic
  PEFINDO is of the view that the outlook of general insurance industry is stable in the near to medium term, highlighted by the improvement of business environment amid the recovering economic after pandemic, as premiums and claims gradually return to normal levels. As of June 30, 2022 (1H2022), the gross premium grew by 20.0% YoY (year on year), at IDR46.0 trillion in 1H2022 from IDR38.4 trillion in 1H2021, which mostly came from property, motor vehicle and credit insurance segments, the three largest contributors. In line with growing premiums, gross claims have also increased to IDR17.8 trillion from IDR13.1 trillion at the same period or growing by 35.7%, a higher rate than that of premiums but from a much lower base, mainly derived from credit insurance, property, and health insurance segments. More detail ...
• August-2022: Indonesia Packaged Food and Beverage Industry
  PEFINDO is of the view that the packaged food and beverage (F&B) industry in Indonesia will remain stable in the near to medium term, although some challenges will limit the sector growth. We view the risk profile of the packaged food and beverage industry as low on the rationale of stable growth and strong domestic demand due to basic needs, and large population base, especially the productive age with large spending potential. Per capita spending on food and beverages grew by 10.0% in the past nine years from IDR92,254 per month in 2013 to IDR197,682 per month in 2021. These characteristics provide an enormous opportunity for the F&B business to grow in the long term. More detail ...
• June-2022: Strengthening Resilience Amid High Volatility
  We view that the bond market will remain volatile in the near future. The US central bank is likely to maintain its aggressive monetary policy. And central banks in developed countries also took a similar stance in line with the inflation rate, which was far above the target. And finally, it creates a wave of tighter monetary around the world to avoid pressures from capital outflows, which can worsen exchange rates and economic stability. More detail ...
• April-2022: Indonesian Transportation Infrastructure
  We are of the view that the outlook for transportation infrastructure will remain stable, though we believe that some subsectors will continue to operate at a much challenging operating environment compared to the pre-pandemic levels. It is no doubt that transportation infrastructure such as toll roads, railways, and airport, is and always will remain critical to the well-functioning of economic activities as it ensures everyday mobility of people as well as production and distribution of goods. Therefore, having a quality infrastructure is fundamental to a country’s economy and its future competitiveness. However, the Covid-19 pandemic has severely affected the demand for transportation infrastructure operators because of the government’s measures, not only domestically but also worldwide, to contain the pandemic through mobility restrictions and social distancing measures. More detail ...
• February-2022: Outlook in 2022: Cautious Growth Along with The Economic Recovery Trajectory
  We view the outlook for the multifinance industry to remain stable over the short and medium-term, highlighted by the expectation of positive growth of 2% - 3% in 2022, continuing an improving growth trend in financing in spite of the challenging environment. As of 2021, the industry’s net service assets (NSA) were recorded at IDR500.0 trillion, contracting by 1.0% YoY compared to IDR504.9 trillion as of 2020. In spite of the contraction, we expect the industry’s NSA to recover in 2022 as aligned with the economic recovery, as reflected in the increasing NSA of IDR506.7 trillion as of 1M2022, a positive growth of 1.2% YoY compared to IDR500.6 trillion as of 1M2021. However, the high portion of restructured financing receivables is still a hindrance to future business expansion, as recorded at IDR219.0 trillion as of 2021 (44% of total NSA), still slightly increasing from IDR214.1 trillion in 2020 (42.7%) in spite of flattening curve. Such condition may also put additional pressure on asset quality. More detail ...
• December-2021: Working Smart to Revive the Tourism Sector
  We are of the view that the outlook for the tourism sector will continue to remain negative over the short to medium term. The resurgence of the Covid-19 variants, such as the delta and omicron, adds another layer of uncertainty about the pandemic and its effects on the sector and its recovery prospects, in our view. Therefore, we believe government support will be pivotal for the sector to survive during the pandemic, and to recover post the pandemic. More detail ...
• October-2021: Accompanying Better Growth Prospects by Improving Profitability
  We are of the view that the outlook for the life insurance industry remains stable in the medium term. We expect growth prospects for life insurance gross premium to improve as in line with the domestic economy recovery as improvement of people’s purchasing power and business conditions translate into higher household spending on life insurance products. Increasing awareness of the public to have life insurance coverage in the midst of the Covid-19 pandemic is another factor that should support demand growth. Furthermore, long-term growth remains promising given the low penetration and density, which should increase through wider use of digital channels and improvement in financial literacy. However, the life insurance industry still faces significant challenges to improve its overall profitability, where investment and underwriting issues as well as stagnant premium growth contributed to underwhelming bottom-line performance. In addition, the fragmented market also shows that there are a number of players who still need to raise capital to increase their capacity to absorb risks and compete with the big players in the industry. More detail ...
• August-2021: Keeping High Growth Pace Amid a Pandemic
  We are of the view that the prospect for the pharmaceutical industry to remain prospective in the near to medium term. Demand for pharmaceutical products should remain robust, especially those related to handle the Covid-19 pandemic, despite the weakening purchasing power and supply chain disruptions due to mobility restrictions. The pandemic has spurred the growing awareness of health, encouraging people to access more pharmaceutical products, such as multivitamins and other supplements. Long-term growth is also prospective, given the favorable demographic profile, easier access to healthcare facilities, and better digital health ecosystem. However, the high dependence on imported raw materials will remain a challenge in this industry due to its vulnerability to logistic disruptions and fluctuation of exchange rate. Regarding the competitive landscape, the local pharmaceutical industry is highly fragmented with numerous players, especially in the downstream segment. However, we expect domestic companies to remain dominant, while deregulation of foreign ownership may threaten the existing players. More detail ...
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• February-2023: The Economy in Early 2023: The Promise of a Recovery But Need to Remain Vigilant
  The world economy in 2023 is expected to grow higher than previous estimates in line with inflation, which has reached a turning point in several countries, and monetary policy tightening, which has begun to slow down. Nonetheless, the risk of monetary policy tightening that was pursued so high throughout 2022 requires continued vigilance for the risks, especially the impact on corporate performance in various parts of the world. From domestic development, economic conditions that keep showing good performance continue to provide their own optimism. The central bank has kept interest rates on hold since February 2023 as inflation is expected to continue to slow and decline. This then gives a positive sentiment even though the risks from the policies posed also need to be watched out for. The condition of the national macro economy, which continues to show good performance as reflected in the latest leading indicators, is also expected to be followed by the company's need for funding to expand in order to respond to the increase in demand. This then encourages the issuance of bonds to grow in the first two months of 2023 when compared to the first two months of the previous year. More detail ...
• December-2022: Indonesia Economic Outlook 2023: Maintaining Resilience Amid High Uncertainty
  The war between Russia and Ukraine has brought uncertainty back to levels above the average for the past 22 years. Increased uncertainty was caused by soaring commodity prices and resulted in rising inflation in all countries in the world. This then made central banks in various countries, including developed countries, increase their interest rates to tame the rising inflation. However, this policy had an impact on weakening global economic growth which has occurred since the second semester and is expected to continue in 2023. Nonetheless, the Indonesian economy, which until the third quarter of 2022 managed to achieve a solid economic recovery with growth of 5.7%, is expected to continue to recover along with various leading indicators which are still showing good performance. Throughout 2022, Indonesia become one of the countries that have succeeded in suppressing inflation due to an optimal mix of monetary and fiscal policies, so that the soaring price that occurs at the global level are not fully transmitted to the domestic economy. In 2023, PEFINDO projects that the Indonesian economy will be able to grow in the range of 4.9% - 5.2% supported by solid consumption, and the windfall effect of rising commodity prices will still leave opportunities that can be exploited to boost exports. With the global economic downturn that is expected to give a minimum impact on the domestic economy, business activities are predicted to continue the positive trend and encourage the issuance of corporate debt securities which are expected to reach IDR144.24 – 158.27 trillion. Challenges such as interest rates and inflation which remain high, the value of bonds with a lower maturity in 2023, and the wait-and-see condition that might occur in line with conditions leading up to the elections, still overshadow the Indonesian debt market in 2023. However, the opportunities that emerged from the maintained macroeconomic conditions and the still attractive Indonesian bond market, could also encourage the issuance of bonds to be higher in 2023. More detail ...
• October-2022: Indonesia’s Economy Records Impressive Achievements Amid a Slowing Global Economy and
  The global economy is overshadowed by a divergent recovery and slower economic growth projections up to 2023. It is triggered by the high inflation in various countries that lead the central banks to raise their interest rates. Amid those situations, Indonesia can still record impressive economic growth in Q3-2022 with the condition of inflation that is still manageable and lowers unemployment. Leading indicators for the real sector show good prospects and continue to strengthen. These conditions indicate that economic recovery will continue. More detail ...
• August-2022: Indonesia Recovery Continues But Facing The Challenge of Increasing Global Commodity P
  In Q2-2022, the global economy is still faced with various uncertainties that pressure economic recovery. In a report released in July, the IMF revised its projection for global economic growth of 0.4% from the previous 3.6% to only 3.2%. Various uncertainties that occur every day in the world and pose a downside risk include the ongoing COVID-19 pandemic, the Russia-Ukraine geopolitical conflict which then has an impact on global supply chain disruptions, rising energy and food prices, as well as the normalization of monetary policy in various countries triggered by rising inflation. More detail ...
• June-2022: While Global May Experience "W" Economic Recovery what About Indonesia?
  We view that the domestic economic recovery remains on track. We maintain our forecast for economic growth in the 5.11% - 5.46% range for FY2022, as we projected earlier in the year. Stronger consumption and investment will be supported by prudent monetary policy, accommodating external pressures while supporting the domestic recovery. However, we look at risk factors for the domestic economy. Pressure on the rupiah may remain due to the interest rate disparity and a lower trade balance surplus going forward. In addition, high energy prices can increase production costs, spur inflation and weaken household purchasing power. And these conditions affect the prospects for business profitability - as well as investment - and household demand for goods and services. More detail ...
• April-2022: Overview of World Economic Development
  Year 2021 is the year of recovery for each country in the world. After Covid-19 vaccines are found, and vaccination is implemented, the economy started to grow again. Developed countries economic growth bounced back to normal. On average 2021, Italy experienced the highest economic growth by 6.63 percent, followed by UK 6.5 percent. USA experienced 5.7 percent economic growth, followed by France 5.40 percent. Japan experienced low economic growth among developed countries, by 1.85 percent, followed by Germany, 1.80 percent. More detail ...
• February-2022: The Impact of BI Policies and Regulations on Multifinance Sector
  PEFINDO estimates the consequence of increase of IDR Reserve Requirement Ratio, the supply of credit will be declined. Therefore, assuming that demand for funds in the finance market remain stable, the interest rate for credit of motoried vehicle will increase. In addition, the bond market yield in the multifinance market is also expected will increase, following the increase of credit market interest rate and the Federal Funds rate. The demand of finance corporation for banking funds will also decrease along with rise of bank loan interest rate. More detail ...
• December-2021: The Development of Macroeconomics and Its Impact on Tourism Industry
  Year 2021 has been ended with positive sign of recovery. The economic growth in 2021 is expected to be 3.7 percent YoY. The inflation has been kept stable at 1.8 percent. Government Bonds yields is maintained at 6.5 percent. IDR Exchange rate is also stable, around IDR14.200-IDR14.600 per USD. That supports a positive impact on tourism industry. Given all indicators, the Indonesian economy in year 2022 will grow strong as before the pandemic. The expected economic growth in year 2022 will be between 5.0 to 5.2 percent. However, there are some challenges for the Indonesian economy ahead, especially for tourism industry. First, the on-going pandemic. The ongoing pandemic will cause the recovery of economic activities slow down. Second, the increase of price of cooking oil. This increase has led to increase of inflation that hikes the price of food and beverages, as part of tourism industry. Third, the increase of federal funds rate, as has been announced by the Federal Reserves. This increase will lead to the increase of domestic interest rate. Those three variables will challenge the Indonesian tourism industry during 2022, causing some obstacles to growth. More detail ...
• October-2021: Macroeconomy Forecasting Analysis Q4 2021
  PEFINDO is of the view 3 scenarios regarding economic growth in Q4 2021. Those scenarios are low economic growth, moderate economic growth and high economic growth. As we already know that in Q3 2021, the quarter to quarter economic growth reached only 1.55 percent (year-on-year economic growth reached 3.5 percent). Compare to quarter to quarter Q2 2021, as high as 3.51 percent (year-on-year economic growth reached 7.0 percent), the economic growth in Q3 2021 is only 50 percent of economic growth in Q4 2021. As we know, big expenditures in Q2 happened because there are financing for Covid-19 patients by the Central Government. More detail ...
• August-2021: Tapering (Without) Tantrum
  In response to the economic impact of the Covid-19 pandemic, the Federal Reserve cut short-term interest rates to zero on March 15, 2020 and restarted its large-scale asset purchases (more commonly known as quantitative easing or QE. Since July 2021, the Fed has been buying $80 billion of Treasury securities and $40 billion of agency mortgage-backed securities (MBS) each month. As the economy rebounded in mid-2021, Fed officials began talking about slowing—or tapering—the pace of its bond purchases. In the previous tapering in 2013, it created a tantrum, which adversely affected not only the US capital market but also the global market including Indonesia. Therefore, the financial markets, most notably the emerging markets, including Indonesia, have been anticipating the likely impact of the forthcoming tapering. Will it lead to another tantrum or is this time different? More detail ...
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• February-2023: The Outlook for The Bond Market is Stable Amidst The Uncertainty
  We expect the government bond market to perform stably through the end of the first half of 2023. Domestic demand is strong, with government bonds becoming a more attractive option than other investments amid the current uncertainty. In addition, we expect foreign capital will enter, considering higher yields and the sovereign rating to be reaffirmed at investment grade. In addition, we expect the current account surplus will last into 1H2023, supporting the rupiah to remain stable. However, the market will still face high volatility amidst the transitional uncertainties in the world's growth prospects. Developed countries are still facing stubborn inflation rates to fall. Despite the slowdown, the percentage is still far above the target amid the tight labor market. Even though interest rate increases will likely be milder, the market is waiting for when the central bank will start to reverse its monetary policy. Turmoil in the banking sector in developed countries and the protracted geopolitical crisis will also be watched out for in the future. More detail ...
• December-2022: Starting in 2023: Where will The Bonds Market be Headed in The First Quarter?
  We expect the domestic bond market to face continued volatility in the first quarter of 2023. While we hope for positive foreign capital inflows for FY2023, their flows are expected to remain volatile as central banks in advanced economies still show a willingness to raise interest rates, although at a milder level, due to lingering inflationary pressures. Thus, the latest trend on the economic data released in 1Q2023 will significantly determine when they will raise interest rates again and how long they will hold high-interest rates. Thus, market participants will be looking forward to it to formulate an investment strategy. As a result, we don't expect them to take long positions yet. And the latest capital inflows at least illustrate where foreigners are hunting for short-term tenors and selling long-term tenors. Even though the market will still be volatile, we expect a subdued performance in the government bond market at the beginning of the year. Attractive pricing and solid domestic demand will underpin performance. Unfortunately, we saw a risk to performance earlier this year. In addition to volatile foreign flows, the market will face supply risks due to the front-loading strategy and high supply. More detail ...
• October-2022: Successfully Maintaining Performance in a Volatile Market
  We believe the domestic bond market will continue to maintain its performance during a volatile market. We see inflation lower than anticipated and lower than in developed economies prompting central banks to avoid aggressive monetary tightening. In addition, the trade balance surplus - and also because the domestic stock market remains attractive as the economy recovers more strongly - reduces translational risk pressure from foreign investment outflows in the bond market. Then the solid domestic demand supported the market performance, significantly offsetting the correction during investors relinquishing their holdings. More detail ...
• August-2022: Positive Amidst The Investment Cycle Shift
  Higher yields are inevitable as monetary normalization towards a tighter direction is not over yet. In addition, policy normalization has also been continuing in the domestic market, with most recently, the central bank raising policy rates. We expect translation risk to remain low considering the central bank's strong commitment to maintaining stability and the trade balance surplus. More detail ...
• June-2022: Banking Outlook in 2022: Continuing Gradual Recovery Trend
  We are of the view that the banking growth prospect will be selective. Higher tier banks will still benefit from the stronger ability in deposit collection, lower-cost funding, and higher loss provision, enabling them to be significantly more competitive. However, given that the economic recovery is more in a gradual fashion, the number of quality debtors has not recovered to the pre-pandemic level, meaning that the number of loan takeovers will still be high. This also means that growth in stronger banks comes at the expense of business contraction in other banks and will also affect their profitability. More detail ...
• April-2022: Expect Yield to Peak Soon
  We are in the view that the upward pressure is likely to persist for some time to come due to tighter monetary policy, geopolitical risks, and portfolio shifts, which are negative factors for the domestic bond market. And the increase took place not only in Indonesia but also in other countries. And, compared to them, the Indonesian bond market remains attractive due to positive real yields and well-maintained fundamentals. More detail ...
• February-2022: More Pressure on Board in The Near Future
  We believe that pressures on yields will intensify due to stronger negative external sentiment and tighter domestic monetary policy, which will begin normalization at the beginning of the first quarter of 2022. We expect yields to move in the range of 6.38%-6.74% with a tendency to the upper limit. Although we see some positive catalysts, an increase in yields is inevitable. More detail ...
• December-2021: Starting to Feel Upward Pressure on Yields
  We view that an upward trend at the beginning of the year is inevitable amid strong external pressures, where central banks in developed countries, particularly the US, have begun to take steps to tighten monetary policy. While domestic fundamentals are expected to remain stable, with inflation and interest rates remaining unchanged in the early months of 2022, such external sentiments have impacted upward pressure on government bond yields. In addition, we also view that translation risk, particularly from the trade balance and oil prices, is another source of pressure on bond yields. As a result, based on the Bloomberg consensus, government bond yields for the benchmark tenor, 10 years, are expected to move higher in the range of 6.380%-6.520% in the first quarter of 2022. More detail ...
• October-2021: Maintaining Performance Until The End Of The Year
  We view that the trend of government bond yields will remain low until the end of 2021. With the support of low-interest rates and a stable rupiah, we expect the benchmark yield to be around 6.24% in the near future. We also expect the risk premium, as reflected in Indonesia’s credit default swaps (CDS), to remain below 100. New supply is also expected to start to slow down as the government’s budget ends. More detail ...
• August-2021: Stable Performance Prospect But at Higher Volatility
  We view the bond market to perform steadily in the short term but at the risk of higher volatility. The prevailing low-interest rates and stable rupiah will support its future performance. The central bank’s policy to absorb government bonds also supports the bond market, which faces an ample supply due to a widening budget deficit. We also believe that domestic investors will maintain their allocation in the government bond market amid uncertainty and abundant liquidity. However, we see a stronger US monetary policy tightening sentiment creating more volatility ahead. More detail ...
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• June 2015 : Indonesian Economic Outlook
  Announcement of the Central Bureau of Statistics on Indonesia's economic growth during the first quarter of 2015 shows that the economic performance is less encouraging. In the first quarter of 2015, Indonesia's economy grew only by 4.7% (yoy). The economic growth is far lower than the growth in the first quarter of 2014 which was 5.14%. In fact, economic growth in the first quarter of 2015 is the lowest growth in the first quarter since 2009. The slowdown of economic growth was indicated by a slowdown in some leading indicators such as sales of cars and motorcycles, sales of cement, and electricity consumption. More detail ...
• January 2013: 2012 Economic Review
  Indonesia economy 2012, strong domestic demand offsets contracting external demand. Private consumption continues to be the main driver for growth cutbacks and the still weak financial system weighted growth prospect in the former while their spillover effects held back momentum in the latter, including the BRIC. The forecast for Indonesia was also trimmed down, but nonetheless its rate of growth remains well above many others; it is expected to be the second highest growing economy among the G-20. More detail ...
• January 2011 : Indonesia Economic Outlook - Indonesia remain attractive among the Emerging Market
  Indonesia’s strong fundamentals and macro economic stability attract portfolio or direct investments. Indonesia economic growth (GDP in %) is supported by strong domestic factors (consumption and investment) and high external demands, in particular demand for export in commodity. Households’ consumption in 2011 is estimated to continue to increase in the range of 4.8% - 5.3% due to improvement in income level, decline in unemployment rate, and the trend in commodity price increase which will further support exporters buying power. The income per capita indicator also goes up to USD3.000 per capita in 2010. This increase is three times higher than that of 2001. More detail ...
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