• Economic Update

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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 ...
      • June-2021: Lets Prepare For The Fed’s “Normalization”
        PEFINDO is of the view that the monetary stance of the central banks will turn tighter in line with the statement of the Fed that it will soon increase their benchmark interest rate (Fed Funds Rate – FFR) to 1% until 2023. Until June 18, 2021 (ytd), at least 34 tight monetary policies have been carried out compared to 25 times which were easing policies. Domestically, although Bank Indonesia still maintains interest rates low at 3.5% and still chooses accommodative monetary policy in line with domestic’s low inflation, but it will be very interesting to see how Bank Indonesia will respond to the policy direction taken by the Fed in next two years. More detail ...
      • April-2021: Time to Leap in Second Quarter 2021!
        PEFINDO is of the view that the business activities and import activities will lead to an economic improvement in the second quarter of 2021. Two main indicators sourced from the Bank Indonesia’s Business Activity Survey (Survei Kegiatan Dunia Usaha) show all sectors recorded positive numbers in the next quarter and the import of Raw and Auxulary materials (Bahan Baku dan Penolong) recorded a hike of 31.80% month-to-month (mtm) or 25.82% year-on-year (YoY) in March 2021. Despite these improvements, the pace of Indonesia’s economic recovery still lagged behind the three biggest economies in the world, namely China, the US, dan Japan. Yet, we believe the expansion will accelerate in the second quarter and the rest of the year. More detail ...
      • February-2021: Waiting For The Recovery Signal
        PEFINDO is of the view that Indonesia has struggled to find a clear path out of an economic recession after experiencing the first annual contraction since the 1998 Asian financial crisis. In response, the government has stepped up public spending to a record high, resulting in rapid growth in sovereign debt. At the same time, however, the hoped-for swoosh-shaped economic-recovery did not materialize as private consumption failed to be the driver for growth in the fourth quarter leading to a contraction of 0.42% (quarter-to-quarter/qtq). More detail ...
      • December-2020: Probability of Yield in 2021: How Low Can You Go?
        PEFINDO is of the view that the success in vaccination program and the sound fundamental of domestic economy, in addition to the global push factor hopefully will have a positive impact on Indonesia’s financial market, hence improving Indonesia’s sovereign yield. The accommodative stance of the central bank (Bank Indonesia – BI) will lead to reopening of widespread business activity and the fiscal stimuli will spur demand of the low and middle level. In the meantime, the sell-off behavior in the global safe-haven asset is expected to drive a resurgence of foreign capital inflows to domestic financial markets. More detail ...
      • October-2020: Turning Point To Accelerate Economic Recovery
        PEFINDO is of the view that uncertainties have reached its peak and domestic economic recession has bottomed out; hence, it is expected that the economy will gradually return to its normal path. Much of these favorable developments were due to the Rp695,2 trillion government budget allocation to mitigate the social and economic impact of the Covid-19 pandemic. The latest (August) Retail Sales Survey performed by Bank Indonesia shows an an encouraging retail sales performance across most commodity groups. Furthermore, the latest (Q3) Prompt Manufacturing Index (PMI), also conducted by Bank Indonesia, jumped from only 28.6 point in the second quarter to 44.9 point in the third quarter, and is expected to increase slightly to 47.2 point in the next quarter (Q4) of 2020. More detail ...
      • August-2020: Vaccine: The Hope
        PEFINDO is of the view that an effective and mass produced COVID-19 vaccine is the key to ending the current global health crisis and its devastating economic impacts. As of August 13, 2020, just one such vaccine has been approved for early use, “Sputnik V”, developed by the Gamaleya Research Institute in Moscow, although experts have raised considerable concerns over its safety and efficacy given that it has not yet completed Phase 3 clinical trials. More detail ...
      • June-2020: Possibilities and Uncertainties Ahead
        PEFINDO is of the view that with so many possibilities and uncertainties, economic recovery from the COVID-19 pandemic could be worse than ever expected. As there are no signs that the pandemic will ease up any time soon, economic growth still faces several risks and challenges ahead. Governments will have to delicately balance the needs of the economy alongside the need to break the chains of virus transmissions. More detail ...
      • April-2020: Adapting to the New Normal
        PEFINDO is of the view that the spread of COVID-19 is changing how we live, confining many people to their homes and radically altering the way we move about. Since the magnitude and speed of the collapse in activities that has followed is unlike anything experienced in our lifetime, and the pandemic is inflicting high and rising human costs worldwide, the necessary protection measures are severely impacting economic activity. Despite the negative effects, the pandemic has already changed consumer behavior, with more concern for health and boosting the online sectors, and drawing some of us to altruism and the collective economy rather than an agglomeration of fragmented individuals. More detail ...
      • February-2020: Coronavirus : The Downside Risk and Policy Maker Response
        PEFINDO is of the view that the rapid spread of the coronavirus disease (Covid-19) that was first detected in Wuhan, China, on December 31, 2019, will have a negative impact on global economic growth and Indonesia as well. Supply chains are disrupted, demand for final goods has weakened, commodity prices are slumping, and risk aversion sentiment has hit investors on a global scale. According to the World Health Organization (WHO), we have to realize that the fatality rate of Covid-19 as of March 1, 2020, was only at about 3.2%, lower than the Severe Acute Respiratory Syndrome (SARS) virus that killed about 10% of all infected individuals and the Middle East Respiratory Syndrome (MERS) outbreak in 2012 that had a fatality rate of around 35%. More detail ...
      • December-2019: Recession Risks Are Receding But We Still Face Uncertainty
        PEFINDO is of the view that the threat of a recession in 2020 has receded, mainly due to the normalization of the yield curve and the progress in the trade negotiations between the United States of America (US) and China. However, there are still uncertainties ahead. The US and other countries may have their own respective risks, and interconnected geopolitical threats and other non-economic risks need to be navigated in order to take advantage of more opportunities in 2020. More detail ...
      • October-2019: Indonesia’s Comparative Advantage
        PEFINDO is of the view that the Indonesian economy is becoming “the most beautifull” investment destination among its peers nowadays. The fundamentals of the domestic economy are relatively stable, indicated by a decrease in risk perception, stable returns and upgraded rating. But although global recession indicators have recently stopped flashing red, given the normalized yield curve and progress in the US-China trade negotiations, there are still uncertainties ahead, especially from trade tensions and geopolitical risk. More detail ...
      • August-2019: Bank Indonesia’s Changing Stance
        In 2019, the majority of central banks changed their policy stances from hawkish in 2018 to dovish. Bank Indonesia (BI) appears to be following this changing global monetary policy trend. In the first quarter of 2019, Indonesia’s central bank still gave hawkish signals in looking at the economy. But at the beginning of the second quarter of 2019, it began to turn around and start giving dovish signals to the domestic economy. More detail ...
      • June-2019: Global Investment Shifts Amid Global Economic Uncertainty
        As a developing country, Indonesia is not immune to the impacts of the current global economic condition. This was seen in the GDP growth figure for the first quarter of 2019, which declined to 5.07% from 5.18% in the last quarter of 2018. Economic growth for the full year of 2018 was 5.17%. More detail ...
      • April-2019: Bank Indonesia’s Dilemma: Reduce Domestic Cost of Funds or Maintain Capital Inflow?
        Indonesia's trade balance is showing signs of recovery, recording two consecutive months of surpluses at USD329.5 million in February and USD540.2 million in March. This is good news as it influences reserves assets, rupiah stabilization and economic growth. As pressure from the trade sector is easing, the US Federal Reserve has indicated it will keep its policy rate unchanged at 2.5% this year, so opportunities for Bank Indonesia to reduce its policy rate (and cost of funds) are increasing. More detail ...
      • February-2019: Growing Sustainable Debt Instrument Trend
        PEFINDO is of the view that the trend towards issuing sustainable debt instruments — green bonds, green commercial papers, and sustainability-linked loans — is growing significantly. Globally, the sustainable debt instruments market surged by 26% year-on-year (yoy) in 2018 to a record USD247 billion, on the back of solid growth from the green bonds sector and the emergence of a number of new products. More detail ...
      • December-2018: PEFINDO 2019 Economic and Corporate Bond Outlook
        PEFINDO forecasts that the external and internal challenges faced by the Indonesian economy in 2018 will still linger over the course of 2019. The monetary policy normalization of the US Federal Reserve or Fed (followed by the European Central Bank or ECB and the Bank of Japan or BoJ), as well as the US-China trade war will continue to be the main challenges for the Indonesian economy in 2019. More detail ...
      • October-2018: Time Consistency to Stabilize Rupiah
        We are of the view that the time consistency (and credibility) of Bank Indonesia’s monetary policy will be understood by economic agents, and will consequently stabilize the rupiah. more ... For further information please register on our website. More detail ...
      • August-2018: Finding The Rupiah’s New Equilibrium
        We are of the view that financial stability, especially the stability of the rupiah exchange rate, is a big priority for the Indonesian economy, to prevent the negative impact of global volatility and promote economic growth. Negative global sentiment from the hawkish trend of several major global central banks and the rising trade tensions between major global economies have pressured the rupiah exchange rate since early 2018. Although we calculate the rupiah as still undervalued by 27.26% to 10.22% to the USD, negative global sentiments mean we predict the rupiah will continue to depreciate at least to the end of 2018. more ... For further information please register on our website. More detail ...
      • June-2018: Pressures on Indonesia’s Financial Markets Don’t Ease
        PEFINDO is of the view that the pressures on Indonesia’s financial markets – the domestic bond market (especially government bonds), stock market, and currency exchange market – have been increasing since the US Federal Reserve (Fed) announced it would raise its interest rate (Fed Fund Rate, or FFR) several times this year. As risk and uncertainty still prevail over the global economy, and the domestic real sector has showed weak progress, we still project that volatility and pressure on Indonesia’s financial markets will continue. more ... For further information please register on our website. More detail ...
      • April-2018: Another Fed Rate Hike? So What We Should Do?
        We appreciate the US Federal Reserve (Fed) rate hike, which will be done several more times and is primarily aimed at normalizing asset prices and reducing the possibility of bubbles in the future. Although there are some trade-offs, and we can see the negative sentiment in the Indonesian financial market, our real sector (especially exports) has an advantage in this situation. So, it would be wise to view this negative sentiment as a short-term cycle, as fundamentally our economy is in good shape. more ... For further information please register on our website. More detail ...
      • February-2018: The Trump Tariff Impacts
        PEFINDO sees the Trump tariffs as disruptive and detrimental for the global economy. More broadly, we are of the view that the tariffs have the potential to cause a trade war, worsening the global financial market, and reducing economic growth, which would produce no winners in the end. To mitigate the risks, we believe that outward- and inward-looking assessments of the Indonesian economy should be done, since both complement each other, to ensure a stronger and more resilient economy in the coming years. more ... For further information please register on our website. More detail ...
      • December-2017: Indonesia Economic Outlook
        Highlights in 2017 Indonesia saw gradual growth in the last three quarters of 2017, and we estimate the full-year economic growth figure between 5.0%-5.2%, slightly stronger than in 2016. There are several reasons for this. First, we expect domestic consumption to have stable growth within 4.8%-5.1%. Amid low inflation, household spending is expected to increase more strongly in line with Christmas and New Year celebrations. These events stimulate spending among consumers — although not all consumer segments showed improvement — thus helping domestic consumption. more ... For further information please register on our website. More detail ...
      • October 2017: Domestic Economic Update Consumption accelerated in third quarter of 2017
        We are confident that Indonesia's economic growth will improve by the end of 2017, with the possibility of it reaching 5.1%-5.2% YoY. We expect improvements in domestic consumption indicators such as car and motorcycle sales, as well as strong consumer confidence in Indonesia and low inflation, will support domestic consumption growth, which we predict will grow at 5.0%-5.1% in 2017. With the growth of banking credit driven by government spending on infrastructure and increased cement sales, we are confident that investment growth will be higher in the third and fourth quarters of 2017. more ... For further information please register on our website. More detail ...
      • August -2017: Domestic Economic Outlook
        We continue to affirm our outlook that Indonesia's economic growth will improve compared to last year, with growth rates of 5.0%-5.2% in 2017. There are several reasons why we believe economic growth will grow faster this year: stable domestic consumption, which we expect to grow 4.8%-5.1% due to stable domestic prices; lower unemployment rate; and the improvement of important commodity prices in Indonesia. These factors can maintain domestic consumption growth stability. more ... For further information please register on our website. More detail ...
      • June 2017: Domestic Economic Update
        We affirm our outlook that Indonesia’s economic growth will improve compared to 2016, with a growth rate of 5.0-5.2% in 2017. We expect domestic consumption to grow 4.8%-5.1% due to stable domestic prices, and the improvement of some important commodity prices. Both factors can maintain stable domestic consumption Indonesia’s GDP in the first quarter of 2017 grew by 5.01% from 4.94% in the same quarter last year. The highest growth was in exports and investment spending. The improvement in export performance was mainly influenced by rising global commodity prices such as coal, tin, nickel and rubber, and rising global economic growth. The continued increase in imports of Indonesia’s major trading partners, such as the US, China, India and Japan, helped boost Indonesia’s export growth. growth. We expect investment spending will increase in line with improvements in the growth of bank credit, boosted by government infrastructure projects. The growth of exports will also increase economic growth due to improvements in Indonesia’s major trade partners’ economies and the commodity prices hike. more ... For further information please register on our website. More detail ...
      • April 2017: Domestic Economic Update
        We still affirm our outlook on Indonesia’s economic growth to improve compared to last year with growth rates ranging from 5.0 to 5.2% in 2017. There are several reasons that make us believe that economic growth can grow better. The first is the stable domestic consumption that we expect to grow in the range of 5.0% to 5.1% due to stable domestic prices and the improvement of some important commodity prices in Indonesia. Both factors can maintain domestic consumption growth stability. In addition, we also expect spending on investment will also increase slightly in line with improvements to the growth of bank credit which is boosted by the existence of government infrastructure projects. More detail ...
      • February 2017 : Global Economic Update
        We view that the global economic growth will be higher this year indicated by the improvement of economic growth in advanced and emerging economies. The economic growth was slightly higher in US and China in the fourth quarter 2016. The economic growth in the Eurozone was also stable at 1.8% (yoy) although the uncertainty toward financial sector after UK’s Brexit vote remained high in this region, the economic growth could be stable at 1,8% (yoy). The decline of economic growth in Russia and Brazil was also limited in 2016 supported by the partial improvement on commodity prices. Improvement of economic growth in emerging market and stable growth in advanced economies will help several commodity prices to increase in 2017. We foresee that the economic growth of advanced and emerging economies continue due to the recovery from the US economy and improvement of export of emerging economies in line with the improvement of commodity prices. However, we believe the uncertainty remain high due to the uncertainty of President Trump’s economic policy in 2017. More detail ...
      • December 2016 : Indonesia Economic Outlook 2017
        Indonesia's economic development cannot be separated from global economic growth, which has been decelerating over the past few years. In October 2016, the International Monetary Fund (IMF) reduced its forecast for 2016 year-on-year (YoY) global economic growth from 3.2% to 3.1%. This decline tracks the latest developments in developed countries like the United States, United Kingdom, European Union, China and Japan. The increase in the US benchmark interest rate or the Fed Funds Rate (FFR) at the end of December 2016 resulted in an appreciation of the US dollar against other currencies. The dollar index has increased 2.3% year-to-date (YTD). The strengthening of the US currency is due to the US economy entering a period of recovery after the global financial crisis of 2008. More detail ...
      • October 2016 : Global Economic Update
        We foresee the global economy remained weak as of the end of third quarter 2016. The uncertainty continued as the fed deferred the FFR hike in Federal Open Market Committee (FOMC) meeting on September 2016. Yellen remained hawkish and stated that The Fed will hike the policy rate in the end of 2016 if the US inflation increased closed to its inflation target and the improvement of the US job market continued in the third quarter. The US economic growth in the second quarter also below the IMF’s expectation. At the same time Japan’s economy remained weak indicated by lower economic growth in the second quarter. Hence, BOJ kept its negative interest rate at 0.1% and continued quantitative easing policy by targeted to buy government bond by JPY80 trillion a year. The weak economic condition was also occurred in Eurozone whereby the economic growth declined from 1.7 percent to 1.6 percent in the second quarter. More detail ...
      • August 2016 : Macroeconomic Update, July 2016 - Global Economic Update
        We are of the view that the global economy remained weak until the end of the first half of 2016. The negative effect of the British Exit (Brexit) form the European Union (EU) increased the uncertainty of the global financial market. The depreciation of the British pound sterling saw the European Central Bank (ECB) respond by keeping a negative interest rate and extending the timeline for the quantitative easing program from the first quarter of 2017 to the fourth quarter of the year. At the same time, the Bank of Japan (BOJ) expanded asset purchasing and kept a negative interest rate policy to prevent a stronger yen. More detail ...
      • June 2016 : Monthly Macroeconomic Update June 2016
        The Decline of Global Economic Growth Continued In May 2016. PEFINDO is of the view that global economic condition remained weak for the second quarter of 2016 as the decline of US economic growth in the three consecutive quarters followed by the decline of China's GDP and industrial production growth in the same period. At the same time, the aggregate demand of Japan and Eurozone remained weak indicated by lower inflation in Japan and high unemployment rate in Eurozone. More detail ...
      • April 2016 : Indonesian Economic Update March 2016
        Global Economic Update and Its Impact on the Indonesian Company. The decline in global economic growth in 2016 is predicted to also suppress Indonesian economic growth. The International Monetary Fund (IMF) predicts that global economic growth will decline from 3.8% at the beginning of October 2015 to 3.4% in 2016. This is due to factors such as limited growth in developed countries like America, Japan and the Eurozone, and the decline in the growth of developing countries such as China, Russia and Brazil. In addition to the weakening of economic growth in developing countries, which have been the engine of world economic growth during the last 10 years, the decline of commodity prices in the mining and plantation sectors has also affected and reduced the economic growth of commodity exporting countries such as Venezuela, Malaysia and Indonesia, and those in the Middle East. More detail ...
      • September 2014 : More certainty on political front
        Not so much global economic recovery after all. In July the IMF revised down 2014 global economic forecast by 0.3ppt to 3.4%, further reversing early year’s optimism that recovery is gaining momentum. The weakening is expected to come from both advanced and emerging economies with each of their GDP estimates lowered by 0.4ppt and 0.2ppt. Advanced economy group is in particular hit by the USA whose expansion is anticipated to come slower than the initial expectation given the substantial GDP contraction in 1Q14 regardless of improving outlook in Japan and the UK. From the emerging region, the highlight is on Russia’s 1.1ppt correction due to its geopolitical risk. The Fund sees world economy activity to accelerate in the end of 2Q14 following the waning of weather effect in the US and the country’s continuing loose monetary policy as well as pro-growth policy adjustment in emerging markets. Thus, the growth forecast for 2015 remains at 4%. More detail ...
      • July 2014 : Stabilization on-track
        Advanced countries recovery continues. Recovery in the US is getting stronger ground. Despite bad weather affecting the first quarter GDP (-1% qoq annualized vs. 2.6% in 4Q13), the recent and frequent indicators suggest the economy is still improving. The Apr14 unemployment rate continues to fall to 6.3%, the lowest since Oct08, which is in line with the revival of manufacturing activities. A more downbeat outlook is seen in European economy where it seems to have reached its growth peak . The EU economy grew by 0.9% yoy in 1Q14, yet there is mixed signal across member countries. Among the core economies, Germany outperformed while France’s industrial index fell below 50, suggesting slowdown in manufacturing activity. On the positive note, the periphery countries such as Spain, Greece, and Portugal have shown continued improvement. More detail ...
      • May 2014 : Stabilizing yet no room for complacent
        The IMF slightly revised down global economic growth forecast. The projections for 2014 and 2015 are each 0.1ppt lower to 3.6% and 3.9% with notable downside revision seen in Japan, Brazil, and Russia (see exhibit 8). Low inflation rate is the concern in advanced economies as it implies risk in economic activity. Meanwhile, emerging markets are dealing with maintaining growth amid tighter financial condition and normalizing US monetary policy. These are in addition to rising geopolitical risk in relation to Russia and Ukraine. The IMF did not change US figures. Lately, US recovery seems to continue albeit not as strong as market watchers wanted them to be. This is reflected in the recent publishing of GDP, nonfarm payroll, and ISM manufacturing data which are missing consensus expectation. More detail ...
      • March 2014 : Heading to right direction
        US economic growth revised lower. The second estimate over US’ 4Q13 economic growth showed revision to 2.4% qoq annualized, less than expected by the Bloomberg consensus of 2.5% and initial estimate of 3.2% (4Q13: 4.1%). The revision reflects less spending on household consumption and export than previously calculated. Yet, the real deal of the quarter’s slowdown was nonfarm private inventory which contribution to growth flatted to 0.14ppt from 1.55ppt in 4Q13. Nevertheless, the recent labor data still pointed to recovery trend. Non-farm payroll added 175k gain in Feb14 from expectation 149k, while unemployment hover around 6.7%. We believe the recent positive data on labor will warrant reason for Fed to continue tapering, which may be announced on Fed meeting on 19 Mar14. Furthermore, on the fiscal side, the US has raised its debt ceiling as President Obama’s signing allowing debt ceiling raise until Mar15. Such direct approach resulted in a minimum market-damaging political clash, unlike the previous episodes of limit increase. More detail ...
      • November 2013 : Indonesia economic update - Moving to new equilibrium
        BI is likely to pause rate hike, but maintain its tight policy bias. Deflation in Sep13 and trade surplus in Aug13 will give comfort to the rupiah. Tighter liquidity, weaker currency, and higher fuel prices will help lower the current account gap through slowing economic activities, albeit gradually. We think the current account deficit is still on track to narrow to around 3.1%-3.5% of GDP for 2013 and decline to 2.7% of GDP in 2014. More detail ...
      • September 2013 : Indonesia economic update - Addressing external and internal imbalance
        We expect the pressure on the currency to continue into the 3Q13. We believe the measures that have been taken by the central bank and government, such as hiking fuel price, increasing interest rate, and weaker currency will eventually help narrowing the current account deficit. However, the improvement will not be seen until toward end of the year. The increase in subsidized fuel prices, for instance, will start to materialize significantly after the festive season end in Aug13, of which trade data will be reported in October. More detail ...
      • July 2013 : Economic Update - All eyes on government fuel subsidy policy
        The government submitted theproposal of 2013 revised budget assumptions which include the policy to reduce fuel subsidy. By the time this report is written, the parliament has approved the proposal. The 2013 revised budget cap deficit to 2.4% of GDP from potentially swelling to 2.9% of GDP (i.e. government estimated higher deficit around 3.8% of GDP), given no fuel subsidy measure. More detail ...
      • May 2013 : Economic Update - Waiting for government's new measure on fuel subsidy
        High price discrepancy between domestic subsidized fuel and non-subsidized fuel has triggered high consumption. The subsidized fuel consumption in the first three month of this year has exceeded 6% of its quota according to Minister of Energy and Natural Resources, which estimated to reach 49mn kl of full year consumption from budget ed 46 mn kl. Not only widen budget deficit (budget deficit widen by IDR5tn every 1 mn kl excess in fuel quota), the high fuel consumption also put Indonesia current account position in deficit territory. More detail ...
      • March 2013 : Indonesia's economy - Rebalancing the equilibrium
        In 2012, the central bank opted to somehow allowing the currency to weaken in order to address current account deficit. The rupiah, in average, weakened by 2%%, as opposed to 3.4% appreciation in peers in 2H12. At the same time, foreign exchange reserves were building up by USD6.2bn in the same period to USD112.8bn at the end of 2012, suggesting less active intervention by the central bank. Nevertheless, things are getting complicated as further currency weakening could trigger risk of foreign sell-off in government bonds as currency loss will wipe out the gains in bonds. More detail ...
      • January 2013: Global Economic Growth
        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 ...
      • October 2012 : Global economic slowdown triggers another round of monetary policy stimulus
        Domestic economy is likely to moderate in 2H12 as global economic slump filtered through lower commodity price and because of BI’s policy response to improve current account deficit. Despite stronger economic growth in 2Q12, we expect some moderation in the 2H12. Prolonged global economic weakness and lower commodity prices somehow will likely take the steam of domestic economy expansion in the 2H12. This condition is also complemented by BI policy that aims to bring the current account deficit to a more sustainable level. The implementation of loan-to-value for property and automotive sector, weaker rupiah’s exchange rate against USD, and tighter rupiah liquidity has helped lower demand for imported goods. More detail ...
      • August 2012 : Domestic demand provides boost to the economy amid global downturn
        Solid domestic demand is likely to weather global slowdown. Despite the impact from the sluggish external demand may remain visible in 2H12, we think domestic demand both propelled by private consumption and investment will continue to grow solidly. The government’s plan to increase the level of non-taxable income to around IDR24mn from IDR15mn, stable inflation particularly due to delay in fuel price hike, and cheaper cost of borrowing will help sustain consumer purchasing power. More detail ...
      • April 2012 : Domestic economic update
        Recent indicators suggest that the economy is on track to achieve above 6.0% growth in 1Q12. Private consumption and investment is expected to remain sound in 1Q12. Despite higher inflation expectation consumer purchasing power remains solid. Car and motorcycle sales grew 13.4% yoy and 2.9% yoy until the second month of the 1Q12 (see exhibit 4), a rebound compared to the same period in 4Q11. Retail sales rose 13.9% in Jan12 from only 10.1% growth in 2011. Income improvement and availability of employment, especially in the formal sector, have helped to induce consumer optimism, thus drive spending. More detail ...
      • October 2011 : 2Q11 GDP - Increasing capacity to grow
        Despite gloomy global economic outlook Indonesia economy continue to show strong performance. Indonesia’s GDP grew strongly by 6.49% yoy (vs. 6.47% yoy in 1Q11) or 2.87% qoq in 2Q11, which mainly driven by both domestic and external demand. Overall, the economy has managed to grow 6.48% yoy in 1H11, which is in line with government’s economic growth target at 6.50% in 2011. Strong domestic demand continued to lead economic growth in 2Q11 as it grew 5.80% yoy, much higher compared to 1Q2011. More detail ...
      • July 2011 : Indonesia’s economy expanded by 6.5% in 1Q11 backed by healthy private consumption
        Indonesia GDP expanded 6.46% yoy, or 1.53% qoq in 1Q11, in line with our estimate but slightly lower than consensus that expected to see 6.6% yoy growth for the quarter. Despite slower pace of growth compared with in the 4Q10, we found the results positively, as the economy stil managed to grow faster than the last decade growth average of 5.2%. The growth momentum was also high enough to bring down unemployment rate further to 6.8% in Feb11 from 7.1% by end of 2010. More detail ...
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