Thursday May 17 2018
Indonesia Hikes Key Rate for First Time since 2014
Bank Indonesia | Gabriela Costa | gabriela.costa@tradingeconomics.com

The central bank of Indonesia rose its benchmark 7-day reverse repo rate by 25bps to 4.5 percent on May 17th 2018, in line with market expectations. It is the first rate hike since November 2014, as Bank Indonesia tries to maintain economic stability amid a falling rupiah, escalating risks in the global financial market and global liquidity downturn. Policymakers added they will continue to implement stabilization measures in line with the rupiah’s fundamental value, suggesting further tightening could be necessary if the rupiah keeps falling.

The lending and the deposit facility rates were also increased by 25bps to 5.25 percent and 3.75 percent respectively.

Policymakers noted that the rupiah depreciated 1.47 percent in the first quarter of 2018 and 1.06 percent in April, sparked by global USD appreciation and that the exchange rate was managed according to domestic economic fundamentals and appropriate stabilization measures. The central bank stated that it will continue to monitor the risk of global financial market uncertainty by continuing the exchange rate stabilization measures in line with the rupiah’s fundamental value. 

Domestic economic growth increased in the first quarter of 2018, backed by increasing investment (highest in five years) and resilient private consumption. Also, the current account deficit narrowed to 2.1 percent of GDP from 2.3 percent in the last quarter of 2017. As so, Bank Indonesia anticipates a controlled current account deficit in the 2.0-2.5 percent of GDP range in 2018, remaining within a safe threshold of not more than 3 percent of GDP. 

Both growth (5.1-5.5 percent) and inflation (3.5±1 percent) forecasts for 2018 were kept unchanged. 




Tuesday May 15 2018
Indonesia Trade Balance Swings to Deficit in April
Statistics Indonesia l Chusnul Ch Manan | chusnul@tradingeconomics.com

Indonesia recorded a trade deficit of USD 1.63 billion in April of 2018, swinging from a USD 1.33 billion surplus a year earlier and missing market estimates of a USD 0.7 billion surplus. mainly due to a surge in imports.

In April, imports jumped 34.68 percent to 16.09 USD billion, following a downwardly revised 8.9 percent rise in the prior month and beating estimates of a 19 percent increase. Purchases of non-oil and gas surged 33.69 percent to 13.77 billion and those of oil and gas jumped by 40.89 percent to 2.32 USD billion.
 
Compared to the prior month, imports went up by 11.28 percent. While purchases of non-oil and gas increased 12.68 percent, those of oil and gas rose by 3.62 percent. Imports went up for : raw material (10.73 percent to 11.96 USD billion); capital goods (6.59 percent to 2.62 USD billion), and consumption goods (25.86 percent to 1.51 USD billion).
  
Imports rose from: the US (20.76 percent); Japan (2.51 percent); Malaysia (2.43 percent); Germany (12.71 percent); India (17.31 percent); China (29.68 percent); Taiwan (19.13 percent); Netherlands (11.79 percent), and Australia (3.49 percent). In contrast, imports went down from South Korea (-2.84 percent); Singapore (-2.42 percent); Thailand (-5.50 percent), and Italy (-7.86 percent).

Exports increased 9.01 percent from a year earlier to 14.47 USD billion, below market consensus of a 12 percent rise and after a dowwardly revised 5.9 percent growth in the prior month. Sales of non-oil and gas products went up by 8.55 percent to 13.28 USD billion, while those of oil and gas increased by 14.50 percent to 1.19 USD billion.
 
Compared to the previous month, exports fell 7.19 percent, as non-oil and gas products decreased by 6.80 percent while sales oil and gas declined by 11.32 percent. By categories, outbound shipments went down for: mineral fuel (-18.18 percent); iron and steel (-31.51 percent); jewelry/gems (-12.03 percent); ore, crust, and metal ash (-14.41 percent), and animal/vegetables fats and oils (-4.57 percent). In contrast sales increased for: rubber and rubber goods (4.14 percent);  various chemical products (4.47 percent); iron and steel objects (19.65 percent); footwear (2.93 percent), and vehicles and parts thereof  (12.59 percent).  
 
Sales went down to China (-22.81 percent); the US (-9.98 percent); Thailand (-3.62 percent); Germany (-3.32 percent), Japan  (-2.60 percent); Netherlands (-5.51 percent); India (-13.25 percent); Italy (-15.03 percent), and Singapore (-5.44 percent). In contrast, exports rose to Australia (1.78 percent); Malaysia (6.36 percent); South Korea (4.63 percent), and Taiwan (6.80 percent).
 
Considering January to April, trade balance posted a deficit USD 1.31 billion, swinging from USD 4.09 billion surplus in the same period of 2017, as imports surged 23.65 percent to USD 60.05 billion and exports rose at a slower 8.77 percent to USD 58.74 billion.
 
 
 





Monday May 07 2018
Indonesia GDP Growth Slows to 5.06% in Q1
Statistics Indonesia l Chusnul Ch Manan | chusnul@tradingeconomics.com

The Indonesian economy expanded by 5.06 percent year-on-year in the first quarter of 2018, following a 5.19 percent growth in the previous period and missing market expectations of 5.18 percent. Both exports and government spending increased at a slower pace while household consumption growth was almost unchanged and fixed investment rose further.

On the expenditure side, net external demand contributed negatively to GDP growth, as exports advanced 6.17 percent (vs 8.50 percent in Q4) while imports increased at a faster 12.75 percent (vs 11.81 percent in Q4). In addition, government spending went up 2.73 percent, slower than a 3.81 percent increase in the preceding three-month period, while household consumption growth was almost unchanged at 4.95 percent (vs 4.97 percent in Q4) and fixed investment grew 7.95 percent (vs 7.27 percent in Q4).

On the production side, output growth slowed for: water and waste management (3.58 percent vs 5.53 percent in Q4); education (4.81 percent vs 5.89 percent); information and communication (8.69 percent vs 8.99 percent); real estate (3.23 percent vs 3.73 percent); business services (8.04 percent vs 9.25 percent); government administration (5.78 percent vs 6.95 percent); healthcare (6.05 percent vs 6.31 percent); and other services (8.42 percent vs 8.87 percent).

On the other hand, output increased at a faster pace for: agriculture (3.14 percent vs 2.24 percent); mining and quarrying (0.74 percent vs 0.08 percent); transport and storage (8.59 percent vs 8.21 percent); electricity and gas (3.31 percent vs 2.27 percent); manufacturing (4.50 percent vs 4.46 percent); wholesale and retail trade (4.96 percent vs 4.47 percent); finance and insurance (4.38 percent vs 3.85 percent); construction (7.35 percent vs 7.23 percent); and hotels and restaurants (5.54 percent vs 5.49 percent).

The government targets 2018 gross domestic product growth of 5.4 percent, while the central bank's forecast is between 5.1 percent to 5.5 percent.
 
 





Monday May 07 2018
Indonesia Economy Contracts 0.42% QoQ in Q1
Statistics Indonesia l Rida Husna | rida@tradingeconomics.com

Indonesia's gross domestic product fell 0.42 percent quarter-on-quarter in the three months to March of 2018, following a 1.7 percent decline in the previous period and worse than market consensus of a 0.3 percent contraction. Government spending, fixed investment and exports shrank.

On the expenditure side, government spending slumped 46.10 percent in the first quarter, after a 39.94 percent jump in the previous period, and fixed investment declined by 4.86 percent, compared to a 4.73 percent increase. Also, exports dropped by 1.03 percent (vs 1 percent in Q4) and imports decreased by 3.88 percent (vs 9.47 percent in Q4). On the other hand, private consumption increased by 0.1 percent, after showing no growth in the preceding quarter. 

On the production side, output fell for: education (-11.36 percent); public administration (-8.92 percent); construction (-4.60 percent); electricity and gas (-2.47 percent); human health and social work activities (-2.00 percent); water supply, sewerage, waste management and remediation activities (-1.18 percent); mining and quarrying (-0.60 percent); and transportation and storage (-0.45 percent). On the other hand, output increased for: agriculture, forestry and fishing (16.36 percent); manufacturing (0.70 percent); wholesale and retail trade, repair of motor vehicles and motorcycles (0.46 percent); accommodation and food service (0.67 percent); information and communication (1.22 percent); financial and insurance activities (2.43 percent); real estate (1.30 percent); business activities (1.12 percent); and other services (1.37 percent).

Year-on-year, the economy grew by 5.06 percent, easing from a 5.19 percent growth in the previous period and missing market expectations of 5.18 percent.





Thursday April 19 2018
Indonesia Leaves Monetary Policy Unchanged
Joana Taborda | joana.taborda@tradingeconomics.com

The central bank of Indonesia left its benchmark 7-day reverse repo rate unchanged at 4.25 percent for the seventh straight meeting on April 19th 2018, in line with market expectations. Policymakers said the current policy stance is consistent with efforts to maintain macroeconomic and financial stability amid rising external pressures.

The lending and the deposit facility rates were also left steady at 5 percent and 3.5 percent respectively.

Excerpts from the Bank Indonesia Press Release:

The policy is consistent with efforts to maintain macroeconomic and financial system stability as external pressures begin to build. Bank Indonesia considers the previous measures taken to ease monetary policy, supported by macroprudential and payment system policies, adequate to boost domestic economic recovery momentum. Moving forward, Bank Indonesia will remain focus on maintaining economic stability as the foundation of robust and sustainable economic growth. Nevertheless, several risks continue to demand vigilance, including external risks in the form of global financial market uncertainty, the rising of oil price and possible furtherance of the US-China trade war. To that end, Bank Indonesia continues to optimise the mix of monetary, macroprudential and payment system policies to strike an optimal balance between macroeconomic stability, financial system stability and the current domestic economic recovery process. In addition, Bank Indonesia also constantly strengthens policy coordination with the Government to maintain macroeconomic and financial system stability, while enhancing structural reforms.

Bank Indonesia projects domestic economic growth in 2018 in the 5.1-5.5% (yoy) range.

Moving forward, as domestic economic growth accelerates, the current account deficit is projected at 2.0-2.5% of GDP in 2018, which is under control and remaining within a safe threshold of not more than 3% of GDP.

Inflation is projected to remain within the target corridor of 3.5±1% in 2018.


Monday April 16 2018
Indonesia Posts Trade Surplus for 1st Time in 4 Months
Statistics Indonesia l Chusnul Ch Manan| chusnul@tradingeconomics.com

Indonesia recorded a trade surplus of USD 1.09 billion in March of 2018, from a USD 1.40 billion surplus a year earlier and missing market estimates of a USD 0.09 billion deficit. It was the first of trade surplus in four months and the largest since October 2017, mainly due to a slowdown in imports.

In March, exports increased 6.14 percent from a year earlier to 15.58 USD billion, beating market consensus of a 1.7 percent rise and after an upwardly revised 12.04 percent growth in the prior month. Sales of non-oil and gas products went up by 8.16 percent to 14.24 USD billion, while those of oil and gas declined by 11.46 percent to 1.34 USD billion.
 
Compared to the previous month, exports rose 10.24 percent, as non-oil and gas products increased by 11.77 percent while sales oil and gas decreased by 3.81 percent. By categories, outbound shipments increased for: mineral fuel (18.58 percent); footwear (15.08 percent); iron and steel (64.94 percent); ore, crust, and metal ash (31.69 percent); and fish and shrimp (23.60 percent). In contrast sales dropped for: tin (-45.25 percent); ship (-88.11 percent); nickel (-12.46 percent); vegetable stuff (-66.48 percent), and animal/vegetables fats and oils (-1.09 percent).
 
Sales went up to China (14.39 percent); the US (23.59 percent); Australia (29.22 percent); Malaysia (7.47 percent); Thailand (14.35 percent); Germany (13.83 percent), Japan  (12.87 percent); South Korea (20.66 percent); Netherlands (8.54 percent); India (25.62 percent); Taiwan (9.46 percent), and Italy (17.94 percent). In contrast, exports fell to Singapore (-12.89 percent).
 
Imports increased 9.07 percent to 14.49 USD billion, following a downwardly revised 24.94 percent jump in the prior month and below estimates of a 13.25 percent increase. Purchases of non-oil and gas rose 11.08 percent to 12.23 billion and those of oil and gas edged down by 0.64 percent to 2.27 USD billion.
 
Compared to the prior month, imports went up by 2.13 percent. While purchases of non-oil and gas increased 2.30 percent, those of oil and gas rose by 1.24 percent. Imports went up for both raw material (2.62 percent to 10.58 USD billion) and capital goods (8.99 percent to 2.45 USD billion). In contrast, imports declined for consumption goods (-12.80 percent to 1.20 USD billion).

Imports rose from: the US (25.02 percent); Japan (17.84 percent); Malaysia (23 percent); Germany (2.06 percent); South Korea (4.43 percent); India (22.34 percent); Singapore (10.63 percent); Thailand (5.27 percent); and Italy (64.53 percent). In contrast, imports went down from China (-17.82 percent); Taiwan (-5.78percent); Netherlands (-7.09 percent), and Australia (-4.42 percent).
 
Considering January to March 2018, the trade surplus was 0.28 USD billion, with exports rising by 8.78 percent compared to the same period a year earlier to 44.27 USD billion and imports increasing by 20.12 percent to 43.98 USD billion.
 
 
 



Thursday March 22 2018
Indonesia Holds Interest Rate at 4.25%
Bank Indonesia | Gabriela Costa | gabriela.costa@tradingeconomics.com

The central bank of Indonesia left its benchmark repo rate unchanged at 4.25 percent for the sixth straight meeting on March 22nd 2018, in line with market expectations. Policymakers said the current policy stance is sufficient to maintain macroeconomic and financial stability and support the domestic economic recovery.

The lending and the deposit facility rates were also left steady at 5 percent and 3.5 percent respectively.

Excerpts from the Bank Indonesia Press Release:

The policy is consistent with efforts to maintain macroeconomic and financial system stability while supporting the domestic economic recovery. Bank Indonesia considers the previous steps taken to ease monetary policy adequate in terms of building domestic economic recovery momentum. Moving forward, Bank Indonesia believes that maintained economic stability will be the backbone of stronger and more sustainable economic growth. Furthermore, Bank Indonesia will continue to monitor the risks, including external risks such as growing uncertainty in the global financial markets and tendency to implement inward-oriented trade policy, which could lower world trade volume and economic growth. Bank Indonesia correctly predicted the higher-than-expected FFR hike on 21st March 2018, and anticipates that the US monetary policy normalisation will continue - with another FFR hike - coupled with rising commodity prices, including oil. Thus, Bank Indonesia will constantly optimise its mix of monetary, macroprudential and payment system policies to strike an optimal balance between macroeconomic and financial system stability and the current economic recovery. In addition, Bank Indonesia also strengthens policy coordination with the Government to maintain macroeconomic and financial system stability, while enhancing structural reforms.

In 2018, Bank Indonesia projects the domestic economy to expand in the 5.1-5.5% (yoy) range, buoyed by increasing government consumption and investment in ongoing infrastructure projects, stable private expenditure and stronger exports, due to growing external demand. 

Bank Indonesia projects the current account deficit in 2018 to remain under control and within a safe threshold at 2.0-2.5% of GDP in line with domestic economic improvements.

Also, inflation is expected to remain within the target range of 3.5 ± 1 percent in 2018.


Thursday March 15 2018
Indonesia Trade Balance Swings to Deficit in February
Statistics Indonesia l Chusnul Ch Manan | chusnul@tradingeconomics.com

Indonesia posted a trade deficit of USD 0.12 billion in February of 2018, swinging from a USD 1.26 billion surplus a year earlier and slightly below market estimates of a USD 0.13 billion deficit. It was the third straight month of trade gap, mainly due to a surge in imports.

In February, exports increased 11.76 percent from a year earlier to 14.10 USD billion, below market consensus of a 12.45 percent rise and after an upwardly revised 8.58 percent growth in the prior month. Sales of non-oil and gas products went up by 11.30 percent to 12.71 USD billion, while those of oil and gas grew by 16.09 percent to 1.39 USD billion.
 
Compared to the previous month, exports went down 3.14 percent, as non-oil and gas products decreased by 3.96 percent while sales oil exports increased by 5.08 percent. By categories, outbound shipments fell for: mineral fuel (-3.93 percent); footwear (-18.19 percent); apparel not knitted (-12.91 percent); electrical machinery/aparatus (-12.04 percent), and iron and steel (-19.17 percent). In contrast sales increased for: tin (404.94 percent); ship (91.38 percent); ore, crust, and metal ash (9.54 percent); nickel (48.14 percent), and paper (3.03 percent).
 
Sales went down to Australia (-16.91 percent); Malaysia (-2.30 percent); Thailand (-16.44 percent); Germany (-17.49 percent), Japan  (-8.62 percent); South Korea (-2.02 percent); Netherlands (-1.02 percent); India (-15.35 percent), and Taiwan (-0.68 percent). In contrast, exports increased to China (7.49 percent); the US (116.52 percent); Singapore (7.10 percent), and Italy (24.09 percent).
 
Imports jumped 25.18 percent to 14.21 USD billion, following an upwardly revised 27.99 percent rise in the prior month and below estimates of a 25.7 percent increase. Purchases of non-oil and gas surged 34.58 percent to 11.95 billion and those of oil while gas decreased by 8.59 percent to 2.27 USD billion.
 
Compared to the prior month, imports declined by 7.16 percent. While purchases of non-oil and gas decreased 8.41 percent, those of oil and gas edged down by 0.06 percent. Imports dropped for both raw material (-7.74 percent to 10.58 USD billion) and capital goods (-9.19 percent to 2.25 USD billion). In contrast, imports went up for consumption goods (1.36 percent to 1.38 USD billion). Imports fell from: the US (-17.24 percent); Malaysia (-12.99 percent); Germany (-20.58 percent); South Korea (-6.67 percent); China (-6.40 percent); India (-10.02 percent); Taiwan (-15.36 percent); Singapore (-15.50 percent); Netherlands (-68.27 percent), and Italy (-17.82 percent). In contrast, imports increased from and Thailand (21.35 percent); Australia (9.53 percent), and Japan (0.03 percent).  
 
Considering January to February 2018, the trade deficit was 0.87 USD billion, with exports rising by 10.13 percent compared to the same period a year earlier to 28.65 USD billion and imports increasing by 26.58 percent to 29.52 USD billion.
 



Thursday February 15 2018
Indonesia Keeps Monetary Policy Steady
Bank Indonesia | Joana Taborda | joana.taborda@tradingeconomics.com

The central bank of Indonesia left its benchmark repo rate unchanged at 4.25 percent for the fifth straight meeting on February 15th 2018, in line with market expectations. Policymakers said the current policy stance is sufficient to maintain macroeconomic and financial stability and support the domestic economic recovery. The lending and the deposit facility rates were also left steady at 5 percent and 3.5 percent respectively.

Excerpts from the Bank Indonesia Press Release:

The policy is consistent with efforts to maintain macroeconomic and financial system stability while supporting the domestic economic recovery. Bank Indonesia considers the previous steps taken to ease monetary policy adequate in terms of building domestic economic recovery momentum. Moving forward, Bank Indonesia believes that maintained economic stability will be the backbone of stronger and more sustainable economic growth. Furthermore, Bank Indonesia will continue to monitor the risks, including global risks such as growing uncertainty in the global financial markets owing to anticipation of a higher-than-expected FFR hike, coupled with the rising oil price, as well as the domestic risks linked to ongoing corporate consolidation, a sluggish bank intermediation function and inflation risk. To that end, Bank Indonesia will constantly optimise its mix of monetary, macroprudential and payment system policy to strike an optimal balance between macroeconomic and financial system stability and the current economic recovery. In addition, Bank Indonesia also strengthens policy coordination with the Government to maintain macroeconomic and financial system stability, while enhancing structural reforms.

In 2018, Bank Indonesia projects the domestic economy to expand in the 5.1-5.5% (yoy) range, buoyed by investment in ongoing infrastructure projects coupled with increasing non-building investment, including private investment, specifically machinery and equipment. In addition, solid export growth is expected to continue as the global economy continues to recover and international commodity prices remain high.

Bank Indonesia projects the current account deficit in 2018 to remain under control and within a safe threshold at 2.0-2.5% of GDP in line with domestic economic improvements.

Bank Indonesia projects inflation in 2018 within the target corridor, namely 3.5±1%


Thursday February 15 2018
Indonesia Trade Balance Swings to Deficit in January
Statistics Indonesia l Chusnul Ch Manan| chusnul@tradingeconomics.com

Indonesia posted a trade deficit of USD 0.68 billion in January of 2018, swinging from a USD 1.43 billion surplus a year earlier and missing market estimates of a USD 0.19 billion surplus. It was the second straight month of trade gap, mainly due to a surge in imports.

In January, exports increased 7.86 percent from a year earlier to 14.46 USD billion, above market consensus of a 7.3 percent rise and after an upwardly revised 7.53 percent growth in the prior month. Sales of non-oil and gas products went up by 8.57 percent to 13.17 USD billion, while those of oil and gas grew by 1.11 percent to 1.29 USD billion.

Compared to the previous month, exports went down 2.81 percent, as non-oil and gas products decreased by 1.45 percent while sales oil exports declined by 14.85 percent. By categories, outbound shipments rose for:  jewelry/gems (78.40 percent); vehicles and parts (18.29 percent); machinery/aircraft mechanics (10.32 percent); apparel not knitted (12.32 percent), and electrical machinery/aparatus (10.32 percent). In contrast sales decreased for:  animal/vegetable fats and oils (-9.59 percent); tin (-71.64 percent); ore, crust, and metal ash (-49.13 percent); iron and steel (-23.68 percent), and nickel (-49.45 percent). Sales went up to the US (8.41 percent); Australia (26.29 percent); Malaysia (4.01 percent); Thailand (23.68 percent); Germany (10.54 percent), and Singapore (1.03 percent). In contrast, exports declined to China (-12.47 percent); Japan  (-5.93 percent); South Korea (-3.95 percent); Italy (-23.63 percent); Netherlands (-7.35 percent); India (-7.73 percent), and Taiwan (-16.03 percent).
 
Imports jumped 26.44 percent to 15.13 USD billion, following an upwardly revised 18.08 percent rise in the prior month and beating estimates of a 19.3 percent increase. Purchases of non-oil and gas surged 28.08 percent to 12.99 billion and those of oil and gas increased by 17.35 percent to 2.15 USD billion.

Compared to the prior month, imports edged up by 0.26 percent. While purchases of non-oil and gas increased 3.65 percent, those of oil and gas decreased by 16.31 percent. Imports increased for raw material (2.34 percent to 11.29 USD billion). In contrast, imports fell for both capital goods (-7.39 percent to 2.49 USD billion) and  consumption goods (-1.46 percent to 1.35 USD billion). Imports rose from: the US (4.55 percent); Malaysia (2.04 percent); Germany (15.02 percent); South Korea (17.01 percent); Australia (9.27 percent); Japan (3.29 percent); China (0.79 percent); India (0.11 percent), and Taiwan (29.94 percent). In contrast, imports decreased from and Thailand (-1.37 percent); Singapore (-4.57 percent); Netherlands (-40.79 percent), and Italy (-0.79 percent).