Thursday November 16 2017
Indonesia Leaves Rates Steady
Bank Indonesia | Joana Taborda | joana.taborda@tradingeconomics.com

The central bank of Indonesia left its benchmark repo rate unchanged at 4.25 percent on November 16th 2017, in line with market expectations. Policymakers said the current policy rate is adequate to control inflation, to maintain a healthy current account deficit and to build economic growth momentum. So far this year, the central bank already cut the borrowing cost twice by a total of 50bps in an attempt to boost the economy. 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 decision was consistent with efforts to maintain macroeconomic and financial system stability as well as build economic recovery momentum, while paying due consideration to global and domestic economic dynamics. Bank Indonesia believes the current policy rate is adequate to control inflation within the target corridor and maintain a healthy current account deficit. Furthermore, the domestic economy has continued to grow, with a more equitable and balanced structure. Nonetheless, Bank Indonesia shall remain vigilant of the risks, including the global risks linked to the plans to tighten monetary policy in several advanced countries, as well as domestic risks, such as the limited growth in household consumption and banking intermediary. Bank Indonesia will continue to coordinate with the Government to reinforce the policy mix in order to maintain macroeconomic stability and financial system stability as well as to enhance structural reforms to strengthen fundamentals of Indonesia’s economy.

The global economy has continued to expand. The global economy is predicted to accelerate by 3.6% on 2017 and 2018 on the back of growth in China, Japan and Europe that has beaten previous expectations, coupled with solid economic gains in the United States. Strong exports and domestic demand are driving China’s economy and restoring consumer confidence. Furthermore, Japan’s economic outlook has been upgraded in line with the ongoing export recovery. In Europe, the economic growth projection has also been revised upwards on export performance, supported by improving world trade and domestic economic recovery. Meanwhile, tenacious consumption and increasing investment contributed to the US economic gains. Congruent with the improving world economic outlook, world trade volume (WTV) and international commodity prices are both expected to surpass the previous projections. Moving forward, Bank Indonesia shall continue to monitor the global risks, including potentially tighter monetary policy in advanced countries as well as geopolitical factors.

Bank Indonesia predicts national economic growth in 2017 at 5.1%, improving thereafter to 5.1%-5.5% in 2018.

Throughout 2017, the balance of payments is expected to remain positive on the back of capital and financial account surplus, with current account deficit maintained at below 2% of GDP.




Wednesday November 15 2017
Indonesia Trade Surplus Smallest in 3 Months
Statistics Indonesia l Chusnul Ch Manan | chusnul@tradingeconomics.com

Indonesia posted a trade surplus 0.90 billion in October of 2017, compared to a 1.24 USD billion of surplus a year earlier and below market estimates of a 1.63 USD billion surplus. It was the smallest surplus in trade balance since July, as exports rose less than imports.

In October, exports increased 18.39 percent from a year earlier to 15.09 USD billion, as sales of non-oil and gas products rose 17 percent while those of oil and gas surged 33.77 percent.
 
Compared to the previous month, exports went up 3.62 percent, as non-oil and gas products increased by 4.22 percent while sales oil exports fell by 1.86 percent.
 
By categories, outbound shipments went up for: mineral fuel (4.82 percent); ore, crust, and metal ash (34.56 percent); vehicles and parts (9.05 percent); footwear (20.27 percent), and fish and shrimp (21.46 percent). In contrast sales decreased for:  electrical machinery/aparatus (-3.17 percent); knit goods (-10 percent);  and jewellry/gems (-22.74 percent). nicle (-23.84 percent), and aluminum (-31.13 percent). Sales went up to all major destination countries: Malaysia (3.96 percent); Thailand (4.50 percent); Germany (1.38 percent); Italy (15.67 percent); China (23.64 percent); India (8.44 percent); Australia (2.59 percent); South Korea (17.47 percent), and the Netherlands (7.45 percent). In contrast exports declined to Japan (-1.37 percent); Singapore (-15.03 percent); the US (-4.66 percent), and Taiwan (-2.40 percent).
 
Imports jumped 23.33 percent from a year earlier to 14.19 USD billion in October, as purchases of non-oil and gas rose 20.33 percent to 11.99 billion and those of oil and gas surged 42.67 percent to 2.20 USD billion.
 
Compared to the prior month, imports rose by 11.04 percent. While purchases of non-oil and gas increased 10.52 percent, those of oil and gas went up by 13.96 percent. Imports increased the most for raw material (12.13 percent to 10.77 USD billion), followed by consumption goods (11.68 percent to 1.25 USD billion) and capital goods (5.60 percent to 2.17 USD billion). Imports went up from: Japan (21.19 percent); the US (8.25 percent); South Korea (19.18 percent); India (32.96 percent); Germany (6.45 percent);  China (8.38 percent); Australia (12.40 percent); Taiwan (8.10 percent), and Malaysia (1.20 percent). In contrast, imports decreased from the Netherlands (-35.05 percent); Thailand (-1.23 percent); Singapore (-0.31 percent), and Italy (-16.41percent).
 
Considering January to October 2017, the trade balance was recorded 11.78 USD billion surplus with exports rising by 17.49 percent compared to the same period a year earlier to 138.46 USD billion and imports increasing by 14.95 percent to 126.68 USD billion.
 




Monday November 06 2017
Indonesia Q3 GDP Annual Growth Rate Below Expectations
Statistics Indonesia l Chusnul Ch Manan| chusnul@tradingeconomics.com

The Indonesian economy advanced 5.06 percent year-on-year in the third quarter of 2017, following a 5.01 percent growth in the previous two periods but missing market expectations of 5.13 percent. The expansion was driven by a rebound in government spending while fixed investment and private consumption continued to increase firmly and net trade contributed positively to growth.

On the expenditure side, government spending went up 3.46 percent, rebounding from a 1.93 percent decline in the preceding three months. Fixed investment grew 7.11 percent, faster than a 5.35 percent in Q2 and private consumption rose 4.93 percent, compared with 4.95 percent in Q2. In addition, exports went up 17.27 percent (3.36 percent in Q2) while imports increased at a softer 15.09 percent (0.55 percent in Q2).  
 
On the production side, output expanded more than in the preceding quarter for: Manufacturing (4.84 percent from 3.54 percent in Q2); water and waste management (4.83 percent from 3.67 percent); construction (7.13 percent from 6.96 percent); wholesale and retail trade (5.50 percent from 3.78 percent); finance and insurance (6.44 percent from 5.94 percent); business services (9.24 percent from 8.14 percent); education (3.70 percent from 0.90 percent); healthcare (7.44 percent from 6.40 percent) and other services (9.45 percent from 8.63 percent). Also, output rebounded for: electricity and gas (4.88 percent from -2.53 percent) and government administration (0.43 percent from -0.03 percent). Meantime, output grew at a slower pace for: Agriculture (2.92 percent from 3.33 percent in Q2); mining and quarrying (1.76 percent from 2.24 percent); transport and storage (8.27 percent from 8.37 percent); hotel and restaurant (4.96 percent from 5.07 percent); information and communication (9.35 percent from 10.88 percent) and real estate (3.64 percent from 3.86 percent). 

The government is targeting economic growth of 5.2 percent this year, while the central bank has forecast a range of 5.0-5.4 percent.




Monday November 06 2017
Indonesia Economy Expands 3.18% QoQ in Q3
Statistics Indonesia l Rida Husna | rida@tradingeconomics.com

Indonesia's GDP grew by 3.18 percent quarter-on-quarter in the three months to September of 2017, easing from a 4.0 percent growth in the previous period and missing market expectations of 3.23 percent. Government spending rose at a weaker pace while private consumption and investment increased firmly and net trade contributed positively to growth.

On the expenditure side, government spending increased by 5.29 percent, much slower than a 29.38 percent rise in the second quarter. Meantime, private consumption advanced 3.44 percent, much faster than a 1.31 percent gain in Q2 and fixed investment increased by 5.25 percent, stronger than a 2.95 percent increase in the June quarter. Exports went up 9.07 percent (-2.33 percent in Q2), while imports increased at a slower 8.99 percent (-1.86 percent in Q2).

On the production side, output grew at a slower pace for: Agriculture (4.25 percent from 8.49 percent in Q2); mining and quarrying (0.03 percent from 0.43 percent); manufacturing (2.17 percent from 2.76 percent); food and accommodation (1.23 percent from 1.46 percent); information and communication (1.40 percent from 5.67 percent); real estate (0.36 percent from 1.04 percent); and education (1.46 percent from 2.99 percent). Meanwhile, output increased at a faster rate for: Water and waste management (1.57 percent from 1.26 percent in Q2); construction (4.88 percent from 2.52 percent); wholesale and retail trade (3.0 percent from 2.86 percent); transportation and storage (5.21 percent from 3.0 percent); finance and insurance (3.27 percent from 1.96 percent); business service (2.59 percent from 2.52 percent); government administration (2.13 percent from 0.11 percent); healthcare (1.61 percent from 0.62 percent) and other services (2.71 percent from 2.56 percent). At the same time, output rebounded for electricity and gas (5.32 percent from -0.99 percent in Q2).

Year-on-year, the economy advanced 5.06 percent in the third quarter of 2017, following a 5.01 percent growth in the previous two periods while market expected a 5.13 percent expansion.





Monday October 16 2017
Indonesia Trade Surplus Largest in Near 6 Years
Statistics Indonesia l Chusnul Ch Manan | chusnul@tradingeconomics.com

Indonesia posted a trade surplus 1.76 billion in September of 2017, compared to a 1.28 USD billion of surplus a year earlier and above market estimates of a 1.18 USD billion surplus. It was the largest surplus in trade balance since November 2011, supported by robust exports.

In September, exports increased 15.60 percent from a year earlier to 14.54 USD billion, as sales of non-oil and gas products rose 13.76 percent while those of oil and gas surged 35.58 percent.
 
Compared to the previous month, exports went down 4.51 percent, as non-oil and gas products decreased by 6.09 percent while sales oil exports rose by 12.71 percent.
 
By categories, outbound shipments went down for: animal and vegetable fats and oils (-9.06 percent); electrical machinery/aparatus (-8.20 percent); knit goods (-16.55 percent); clothing is not knitted (-25.58 percent), and jewellry/gems (-21.41 percent). In contrast sales increased for: mineral fuels (10.66 percent); various chemicals products (3.84 percent); paper/cardboard (35.12 percent); tin (14.47 percent), and ore, crust, and metal ash (14.37 percent). Sales fell to all major destination countries: Singapore (-4.19 percent); Malaysia (-2.99 percent); Germany (-8.69 percent); Italy (-11.41 percent); China (-2.83 percent); the US (-9.63 percent); India (-2.88 percent); Australia (-21.26 percent); Taiwan (-1.69 percent); South Korea (-13.92 percent); Thailand (-7.37 percent), and the Netherlands (-1.60 percent). In contrast exports grew to Japan (3.49 percent). 
 
Imports increased 13.13 percent from a year earlier to 12.78 USD billion in September, as purchases of non-oil and gas rose 13.80 percent to 10.85 billion and those of oil and gas went up 9.54 percent to 1.93 USD billion.
 
Compared to the prior month, imports fell by 5.39 percent. While purchases of non-oil and gas dropped 5.67 percent, those of oil and gas went down by 3.79 percent. Imports dropped the most for capital goods (-7.13 percent to 2.05 USD billion), followed by consumption goods (-5.87 percent to 1.12 USD billion), and raw material (-4.96 percent to 9.60 USD billion). Imports fell from: Thailand (-4.82 percent); Japan (-11.72 percent); the US (-8. 20 percent); South Korea (-8.46 percent); Singapore (-1.07 percent); India (-8.93 percent); Germany (-3.80 percent); Italy (-25.26 percent); China (-4.30 percent); Australia (-18.89 percent), and Taiwan (-18.06 percent). In contrast, imports increased from Malaysia (6.07 percent) and the Netherlands (81.99 percent).

Considering January to September 2017, the trade balance was recorded 10.87 USD billion surplus with exports rising by 17.36 percent compared to the same period a year earlier to 123.36 USD billion and imports increasing by 13.97 percent to 112.49 USD billion.
 
 


Friday September 22 2017
Indonesia Cuts Key Rate to 4.25%
Bank Indonesia | Joana Taborda | joana.taborda@tradingeconomics.com

The central bank of Indonesia unexpectedly cut its key repo rate by 25bps to 4.25 percent on September 22nd 2017, following a similar 25bps cut in the previous meeting. The move aimed to strengthen banking intermediary function and support economic growth. Policymakers said current policy stance is sufficient to achieve inflation and macroeconomic targets, suggesting further loosening is unlikely in the near future. The lending and the deposit facility rates were also lowered by 25bps each to 5 percent and 3.5 percent respectively.

Excerpts from the Bank Indonesia Press Release:

The BI Board of Governors agreed on 20th and 22nd September 2017 to lower the BI 7-day Reverse Repo Rate 25 basis points (bps) from 4.50% to 4.25%, while also lowering the Deposit and Lending Facility rates 25 bps to 3.50% and 5.00% respectively, effective 25th September 2017. The decision was consistent with low inflation, estimated to continue till the end of 2017, and 2018 and 2019 inflation projected to stay below the mid range of the target, as well as current account deficit under control within a heatlhy range. External risks, specifically related to FFR hike and US balance sheet normalization plans, have also been accounted for. The rate cut is expected to support the ongoing improvements in banking intermediation and domestic economic recovery. Bank Indonesia views that the current level of policy rate is sufficient in accordance with the forecast of inflation and other macroeconomics. Furthermore, Bank Indonesia will continue to coordinate with the Government to reinforce policy mix in order to maintain macroeconomic stability and strengthen economic recovery momentum.

Moving forward, economic growth is expected to improve along with more expansive government spending and Bank Indonesia’s monetary policy easing. Consequently, Bank Indonesia maintains its prediction for 2017 national economic growth in the 5.0-5.4% range, accelerating in 2018 to 5.1-5.5%.

Moving forward, low inflation is expected to persist within the target range, supported by anchored expectations, relatively stable exchange rates and the downward global inflation trend. Nevertheless, Bank Indonesia will continue to strengthen policy coordination with the central government and regional administrations to control inflation, to support achievements of the inflation targets at 4.0±1% in 2017 and at 3.5±1% in 2008 and 2019.

Moving forward, bank intermediation is expected to improve in line with BI’s decision to perform rate cut and macroprudential policy easing, while banking and corporation consolidation continues.. In addition, economic financing through capital markets is also expected to improve, in line with financial markets deepening efforts.


Friday September 15 2017
Indonesia Trade Surplus Largest in Near 6 Years
Statistics of Indonesia l Chusnul Ch Manan| chusnul@tradingeconomics.com

Indonesia recorded a trade surplus 1.72 billion in August of 2017, compared to a 0.37 USD billion of surplus a year earlier and above market estimates of a 0.52 USD billion surplus. It was the largest surplus in trade balance since November 2011, as exports jumped 19.24 percent from a year earlier to 15.21 USD billion while imports went up 8.89 percent to 13.49 USD billion.

In August, exports jumped 19.24 percent from a year earlier to 15.21 USD billion, as sales of non-oil and gas products surged 19.94 percent while those of oil and gas rose 12.15 percent.
 
Compared to the previous month, exports went up 11.73 percent, as non-oil and gas products increased by 11.93 percent while sales oil exports rose by 9.61 percent.
 
By categories, outbound shipments went up for: animal and vegetable fats and oils (22.31 percent); mineral fuels (3.81 percent); electrical machinery/aparatus (12.73 percent); knit goods (23.42 percent), and jewelry/gems (107.47 percent). In contrast sales decreased for: various chemicals products (-8.18 percent); paper/cardboard (-6.15 percent); copper (-2.46); inorganic chemiclas (-9.04 percent), and ships (-46.28 percent). Sales increased to all major destination countries: Singapore (32.16 percent); Malaysia (4.23 percent); Germany (1.78 percent); Italy (8.22 percent); China (21.59 percent); the US (15.92 percent); India (13.68 percent); Australia (24.31 percent), and Taiwan (12.01 percent), and South Korea (28.70 percent). In contrast exports fell to Thailand (-4.38 percent); the Netherlands (-0.79 percent), and Japan (-5.63 percent).  
 
Imports increased 8.89 percent from a year earlier to 13.49 USD billion in August, as purchases of non-oil and gas rose 8.85 percent to 11.53 billion and those of oil and gas went up 9.11 percent to 1.96 USD billion.
 
Compared to the prior month, imports fell by 2.88 percent. While purchases of non-oil and gas dropped 4.80 percent, those of oil and gas went up by 10.16 percent. Imports dropped the most for capital goods (-5.95 percent to 2.22 USD billion), followed by raw material (-3.47 percent to 10.07 USD billion),  while consumption goods rose (9.39 percent to 1.17 USD billion). Imports fell from: Thailand (-12.12 percent); Japan (-10.17 percent); the US (-8.87 percent); South Korea (-14 percent), and India (-5.30 percent). In contrast, imports increased from Singapore (4.20 percent); Malaysia (4.47 percent); Germany (10.10 percent); the Netherlands (21.97 percent); Italy (23.21 percent); China (0.53 percent); Australia (13.85 percent), and Taiwan (7.50percent).
 
Considering January to August 2017, the trade balance was recorded 9.11 USD billion surplus with exports rising by 17.58 percent compared to the same period a year earlier to 108.79 USD billion and imports increasing by 14.06 percent to 99.68 USD billion.
 
 


Tuesday August 22 2017
Indonesia Cuts Key Rate to 4.5%
Bank Indonesia l Joana Taborda | joana.taborda@tradingeconomics.com

The central bank of Indonesia unexpectedly lowered its benchmark interest rate by 25bps to 4.5 percent on August 22nd of 2017, compared with market expectations of no changes. It is the first cut in borrowing cost since October, aiming to strengthen banking intermediary function and support economic growth. The lending and the deposit facility rates were also lowered by 25bps each to 5.25 percent and 3.75 percent respectively.

Excerpts from the Bank Indonesia Press Release:

The BI Board of Governors agreed on 21st - 22nd August 2017 to lower the BI 7-day Reverse Repo Rate 25 basis points (bps) from 4.75% to 4.50%, while also lowering the Deposit and Lending Facility rates 25 bps to 3.75% and 5.25% respectively, effective 23rd August 2017. This will be followed by a decrease in interest rates on other monetary instruments.The decision was consistent with the rooms for monetary policy easing, as evidenced by low inflation with 2017 and 2018 inflation projected within the target range, and current account deficit under control within a healthy range. External risks, relating to the Fed hiking its Fed Funds Rate (FFR) and unwinding its balance sheet, have decreased, resulting in the still-attractive domestic interest rate in Indonesia, compared to the external interest rate. The policy rate easing is expected to reinforce intermediation in the banking sector, to strengthen financial system stability as well as support higher economic growth. Bank Indonesia constantly strengthens its mix of monetary, macroprudential and payment system policy to maintain macroeconomic and financial system stability. Furthermore, Bank Indonesia will continue to strengthen coordination with the Government and other authorities to ensure that inflation control, growth stimulus, and structural reforms are going well enough to support sustainable economic growth.

Moving forward, economic growth is expected to improve on the back of increased investment and consumption activities, in line with more expansive government spending and additional rooms to ease monetary policy. Bank Indonesia predicts growth in the 5.0% - 5.4% range for 2017 and 5.1%-5.5% range for 2018.

Moving forward, inflation is expected to remain low within target, on the back of adequate supply compared to demand (output discrepancy), stable exchange rate, global trend of decreased inflation, and low risk in administered prices hike. Bank Indonesia will continue to strengthen coordination with the central government and regional administrations to maintain stable and low inflation.

Banking intermediation is expected to improve in 2018,with credit and deposit growth expected at 10-12% and 9-11%, respectively. To support economic funding as well as financial market deepening, Bank Indonesia with related authorities will speed up consolidation process in the banking sector while promoting credit distribution and corporate funding through financial markets. The policy, along with policy rate easing, is aimed at boosting an optimum banking intermediation to support national economic recovery.


Tuesday August 15 2017
Indonesia Posts First Trade Gap in 19 Months
Statistics of Indonesia l Chusnul Ch Manan| chusnul@tradingeconomics.com

Indonesia recorded a trade deficit 0.27 billion in July of 2017, compared to a 0.63 USD billion of surplus a year earlier and missing market estimates of a 1.1 USD billion surplus. It was the first deficit in trade balance since December 2015, as exports jumped 41.12 percent from a year earlier to 13.62 USD billion while imports soared 54.02 percent to 13.89 USD billion.

During July, both exports and imports rose sharply, due to a low base from July 2016, when the Eid-al-Fitr holidays at the end of the fasting month fell. This year, the holidays were in June. 

Compared to the previous month, exports went up 16.83 percent, as non-oil and gas products increased by 19.85 percent while sales oil exports decreased by 7.79 percent. By categories, outbound shipments went up for: animal and vegetable fats and oils (7.64 percent), mineral fuels (17.17 percent), rubber and rubber goods (28.08 percent), vehicles and parts (52.28 percent), and machinery and aircraft mechanics (39.87 percent). In contrast sales decreased for: jewelry/gems (-2.81 percent), iron and steel (-4.32 percent), inorganic chemicals (-8.0 percent), pharmacautical industry produtcs (-20.53 percent), and aluminium (-24.66 percent). Sales increased to all major destination countries: Singapore (9.66 percent); Malaysia (31.54 percent); Thailand (30.83 percent); Germany (11.52 percent); the Netherlands (5.80 percent); Italy (23.85 percent); China (18.54 percent); Japan (32.76 percent); the US (16.67 percent); India (6.95 percent); Australia (16.57 percent), and Taiwan (18.01 percent). In contrast exports to South Korea edged down (-0.37 percent).
 
Imports surged 54.02 percent from a year earlier to 13.89 USD billion in July, as purchases of non-oil and gas jumped 61.23 percent to 12.11 billion and those of oil and gas increased 18.07 percent to 1.78 USD billion.

Compared to the prior month, imports jumped by 39 percent. While purchases of non-oil and gas surged 44.31 percent, those of oil and gas went up by 11.12 percent. Imports rose the most for capital goods (62.57 percent to 2.36 USD billion), followed by raw material (40.79 percent to 10.43 USD billion),  while consumption goods fell (-3.15 percent to 1.09 USD billion). Imports rose from the majority of trading partners: Singapore (34.34 percent); Thailand (40.63 percent); Malaysia (28.80 percent); the Netherlands (28.78 percent); Italy (72.87 percent); China (46.16 percent); Japan (60.74 percent); the US (44.54 percent); South Korea (49.09 percent); Australia (16.91 percent); Taiwan (70.72percent); and India (66.9 percent). In contrast, imports from Germany fell 7.16 percent.
 
Considering January to July 2017, the trade balance was recorded 7.39 USD billion surplus with exports rising by 17.32 percent compared to the same period a year earlier to 93.59 USD billion and imports increasing by 14.91 percent to 86.20 USD billion.
 
 


Monday August 07 2017
Indonesia Economy Expands 4% QoQ in Q2
Statistics of Indonesia l Chusnul Ch Manan| chusnul@tradingeconomics.com

Indonesia's GDP expanded 4 percent quarter-on-quarter in the three months to June of 2017, following a 0.34 percent decline in the previous period and missing market consensus of 4.10 percent. It was the first quarterly expansion in the economy since the third quarter of 2016, boosted by private consumption, fixed investment and government spending.

On the expenditure side, private consumption advanced 1.32 percent (0.15 percent in Q1) and fixed investment grew 2.95 percent (-5.45 percent in Q1). Also, private non-profit consumption went up 2.93 percent (-1.69 percent in Q1) and government spending expanded 29.37 percent (-45.55 percent in Q1). Meanwhile, exports went down 2.09 percent (0.57 percent in Q1) and imports decreased 1.55 percent (-4.50 percent in Q1). 

On the production side, output grew for: Educational services (2.99 percent from -10.39 percent in Q1); government administration (0.11 percent from -7.91 percent); healthcare (0.63 percent from -1.72 percent); transport and storage (2.91 percent from -1.18 percent); mining and quarrying (0.41 percent from -0.93 percent); manufacturing (2.84 percent from 0.55 percent); wholesale and retail trade (2.82 percent from -0.06 percent); business services (2.52 percent from 2.21 percent); other services (2.56 percent from 1.89 percent); water and waste management (1.26 percent from 0.69 percent); information and communication (5.65 percent from 0.31 percent); finance and insurance (1.96 percent from 1.91 percent); agriculture (8.44 percent from 15.59 percent); and real estate (1.16 percent from 1.79 percent). In contrast, output contracted for electricity and gas (-0.99 percent from -3.45 percent in Q1).

Year-on-year, the economy expanded 5.01 percent, the same pace as in the first quarter but below market estimates of a 5.10 percent growth.