Wednesday August 15 2018
Indonesia Hikes Key Interest Rate to 5.5%
Bank Indonesia | Joana Ferreira | joana.ferreira@tradingeconomics.com

Bank Indonesia raised its 7-day reverse repurchase rate by 25 bps to 5.50 percent on August 15th, the fourth hike in less than three months, in an attempt to support the country's falling currency. The decision came after the rupiah weakened to its lowest since October 2015 on the back of Turkey's currency crisis. The deposit and lending facility rates were also increased by 25 bps to 4.75 percent and 6.25 percent respectively.

Excerpts from the Bank Indonesia Press Release:

Multispeed global economic growth has continued to stoke global economic uncertainty. The US economy continues to gain momentum on the back of accelerating consumption and investment. Meanwhile, the economies of Europe, Japan and China are moderating. Consequently, the Federal Reserve is expected to continue raising the Federal Funds Rate (FFR) gradually, contrasting the reluctance of the ECB and BoJ to hikes policy rates. In addition to the recent FFR hikes, widespread global uncertainty has been exacerbated by simmering trade tensions between the US and several other countries, which have triggered retaliatory actions around the world, including currency depreciation despite broad US appreciation. Global uncertainty has also been fuelled by the risk of spillovers from the economic shocks in Turkey caused by domestic economic fragilities and the adverse impact of negative sentiment surrounding the authorities’ policies, as well as looming tensions with the US. Bank Indonesia will remain vigilant of the external risks, including potential spillover from Turkey although sound economic fundamentals in Indonesia are indicative of solid national economic resilience, coupled with avowed policy commitment.

The national economy has accelerated significantly on strong domestic demand fuelled by private and government consumption.  GDP growth was recorded at 5.27% (yoy) in the second quarter of 2018, the fastest rate since 2013. Meanwhile, household consumption stood at 5.14% (yoy), bolstered by rising incomes, upbeat consumers and controlled inflation. In addition, consumption associated with the local elections also posted solid growth. Meanwhile, government spending has also improved, thereby catalysing strong domestic demand. On the other hand, solid investment growth has been maintained despite fewer total work days in June 2018 that restrained growth slightly. Growing domestic demand has prompted a surge of imports against comparatively subdued export performance. Looking forward, Bank Indonesia predicts solid economic growth on sound investment and consumption performance despite limited export gains. Building and nonbuilding investment remain strong, backed by infrastructure development and investment in the manufacturing industry. Meanwhile, several upcoming events, including the general election, are expected to maintain consumption. Consequently, Bank Indonesia projects economic growth in 2018 in the 5.0-5.4% (yoy) range, subsequently accelerating to 5.1-5.5% (yoy) in 2019.




Wednesday August 15 2018
Indonesia Posts Largest Trade Deficit in 5 Years
Statistics Indonesia | Chusnul Ch Manan | chusnul@tradingeconomics.com

Indonesia's trade deficit widened sharply to USD 2.03 billion in July 2018 from USD 0.3 billion in the same month a year earlier, and well above market consensus of a USD 0.6 billion gap. It was the largest trade deficit since July 2013, as imports jumped to a record high.

Imports surged 31.56 percent from a year earlier to an all-time high of USD 18.27 billion in July, following a marginally revised 12.77 percent rise in the prior month and far above expectations of a 14.1 percent increase. Purchases of non-oil and gas jumped 29.28 percent to USD 15.66 billion and those of oil and gas surged by 47.09 percent to USD 2.62 billion.

Compared to the prior month, imports rose sharply by 62.17 percent, whith purchases of non-oil and gas surging 71.54 percent and those of oil and gas increasing by 22.20 percent. Imports went up for all categories: raw material (59.28 percent); capital goods (71.95 percent), and consumption goods (70.50 percent). Among major trading partners, imports rose from: China (93.44 percent); Australia (53.94 percent); Taiwan (99.21 percent); South Korea (62.92 percent); Singapore (31.18 percent); Thailand (33.17 percent); Japan (75.79 percent); Malaysia (108.01 percent); India (47.15 percent); the US (67 percent); Germany (84.72 percent); Italy (92.23 percent); and the Netherlands (8.56 percent).

Exports increased at a softer 19.33 percent from a year earlier to USD 16.24 billion, beating market consensus of a 11.35 percent rise and after a downwardly revised 11.26 percent growth in the prior month. Sales of non-oil and gas products went up by 19.03 percent to USD 14.81 billion, while those of oil and gas jumped by 22.59 percent to USD 1.43 billion. 
 
Compared to the previous month, exports surged 25.19 percent, as non-oil and gas products jumped by 31.18 percent while sales oil and gas slumped by 15.06 percent. By categories, outbound shipments increased for: electric machinery/equipment (37.23 percent); vehicles and parts (67.50 percent); rubber and rubber goods (51.47 percent); mineral fuel (11.90 percent); and animal/vegetable fats and oils (17.91 percent). In contrast, sales decreased for:  air plane and parts (-58.05 percent); fertilizer (-23.92 percent); ore, metal crust and metal ash (-15.99 percent); ships (-58.97 percent); and wheat (-21.65 percent). Exports went up to: China (6.87 percent); Thailand (45.33 percent); Japan (29.46 percent); Taiwan (90.23 percent); Singapore (37.28 percent); Australia (44.10 percent); Malaysia (29.73 percent); South Korea (34.55 percent); India (34.20 percent); the US (37.96 percent); Germany (54.56 percent); the Netherlands (33.17 percent); and Italy (4.29 percent).

Considering January to July, the trade balance posted a deficit of USD 3.09 billion, compared with a surplus of USD 7.39 billion in the same period of 2017.




Monday August 06 2018
Indonesia Economy Expands 4.21% QoQ in Q2
Statistics Indonesia | Chusnul Ch Manan | chusnul@tradingeconomics.com

Indonesia's gross domestic product grew 4.21 percent quarter-on-quarter in the three months to June of 2018, following a marginally revised 0.41 percent decline in the previous period and beating market consensus of a 4.08 percent expansion. It was the strongest growth rate since the series began in 2005, supported by a rebound in government spending and fixed investment and a faster increase in private consumption.

On the expenditure side, government spending surged 32.52 percent in the second quarter, after a 46.09 percent drop in the previous period; and fixed investment rose 0.97 percent, compared with a 4.86 percent fall in Q1. In addition, private consumption went up 1.54 percent, after increasing by just 0.1 percent in the preceding quarter. On the other hand, net external demand contributed negatively to GDP growth, as exports continued to decline (-0.89 percent vs -1.11 percent in Q1) while imports rose slightly (0.48 percent vs -3.96 percent in Q1).

On the production side, output rebounded for: electricity and gas (3.09 percent vs -2.47 percent in Q1); mining and quarrying (2.23 percent vs -0.60 percent); transportation and storage (3.01 percent vs -0.45 percent); education (3.15 percent vs -11.35 percent); public administration (1.46 percent vs -8.91 percent); construction (0.94 percent vs -4.60 percent); human health and social work activities (1.55 percent vs -2.00 percent); water supply, sewerage, waste management and remediation activities (1.61 percent vs -1.16 percent). Also, output increased faster for: manufacturing (2.17 percent vs 0.76 percent); wholesale and retail trade, repair of motor vehicles and motorcycles (3.19 percent vs 0.43 percent); accommodation and food service (1.96 percent vs 0.59 percent); information and communication (2.13 percent vs 1.05 percent); business activities (3.37 percent vs 1.12 percent); and other services (3.30 percent vs 1.37 percent). On the other hand, output expanded at a softer rate for: agriculture, forestry and fishing (9.93 percent vs 16.53 percent); financial and insurance activities (0.67 percent vs 2.38 percent); and real estate (0.92 percent vs 1.30 percent).
 
Year-on-year, the economy grew 5.27 percent in the second quarter, accelerating from a 5.06 percent growth in the previous period and beating market expectations of 5.16 percent. It was the highest growth rate since the December quarter of 2013.




Monday August 06 2018
Indonesia Q2 GDP Growth Strongest in 4-1/2 Years
Statistics Indonesia | Rida | rida@tradingeconomics.com

The Indonesian economy advanced 5.27 percent year-on-year in the second quarter of 2018, beating market consensus of 5.16 percent and following a 5.06 percent growth in the previous period. It was the strongest pace of expansion since the last quarter of 2013, driven by faster rises in private consumption and government spending while fixed investment grew firmly.

On the expenditure side, household consumption rose 5.14 percent in the second quarter, after a 4.95 percent increase in the previous period; and government spending climbed 5.26 percent, compared with a 2.74 percent advance in Q1. Meantime, fixed-investment went up 5.87 percent, easing from a 7.95 percent jump in the March quarter. Net external demand contributed negatively to GDP growth, as exports increased by 7.70 percent (vs 6.09 percent in Q1) while imports went up at a faster 15.17 percent (vs 12.66 percent in Q1). 

On the production side, output growth accelerated for: agriculture (4.76 percent vs 3.29 percent); mining and quarrying (2.21 percent vs 0.74 percent); electricity and gas (7.56 percent vs 3.31 percent);  water and waste management (3.94 percent vs 3.59 percent); wholesale and retail trade (5.24 percent vs 4.93 percent); accommodation & food and beverages (5.75 percent vs 5.45 percent); business services (8.89 percent vs 8.04 percent); public administration, defense and social security (7.20 percent vs 5.79 percent); education (4.94 percent vs 4.83 percent); health and social services (7.07 percent vs 6.06 percet); and other services (9.22 percent vs 8.42 percent). In addition, output continued to grow firmly for: manufacturing (3.97 percent vs 4.56 percent); construction (5.73 percent vs 7.35 percent); transportation (8.59 percent, the same as in Q1); information and communication (6.06 percent vs 8.52 percent); financial and insurance servives (3.02 percent vs 4.33 percent); and real estate (3.11 percent vs 3.23 percent).

On a quarterly basis, the economy expanded 4.21 percent in the three months to June, also beating market expectations of 4.08 percent and recovering from a 0.42 percent contraction in the previous period. It is the first quarterly growth since the third quarter of 2017 and the fastest on record, helped by seasonal spending during the Muslim fasting month and holiday festivities.

For 2018, the government still expects the economy to grow by 5.4 percent though officials have said the latest outlook is 5.2 percent. The central bank's 2018 forecast is between 5.1-5.2 percent.




Thursday July 19 2018
Indonesia Leaves Monetary Policy Unchanged
Bank Indonesia | Gabriela Costa | gabriela.costa@tradingeconomics.com

The central bank of Indonesia held its benchmark 7-day reverse repo rate at 5.25 percent on July 19th as widely expected. It follows three consecutive rate hikes to support the rupiah which already fell almost 6 percent in 2018 and is trading at its weakest level in near three years. However, the currency has been stable since the end of June when policymakers last hike borrowing costs by 50bps.

The lending and the deposit facility rates were also left steady at 6 percent and 4.5 percent, respectively.

Excerpts from the Bank Indonesia Press Release:

“The policy is consistent with efforts by Bank Indonesia to maintain domestic financial market attractiveness against a backdrop of pervasive uncertainty blighting the global financial markets in order to maintain stability in general and Rupiah exchange rate stability in particular. Bank Indonesia believes that the macro prudential policy easing measures are able to increase liquidity management flexibility as well as banking intermediation for economic growth. Bank Indonesia also strengthens coordination with the government and other related authorities to maintain stability and implementation of structural reform to reduce current account deficit, including foreign exchange from tourism and private sector infrastructure financing. Moving forward, Bank Indonesia will continue to monitor the global and domestic economic developments and outlook in order to strengthen policy mix response in maintaining domestic financial market attractiveness.

The Rupiah experienced depreciatory pressures against broad USD appreciation. The Rupiah strengthened at the beginning of July 2018 in response to Bank Indonesia’s pre-emptive, front-loading and ahead-of-the-curve monetary policy instituted at the Board of Governors’ meeting (RDG) held in June 2018 through a 50bps hike in the BI 7-Day (Reverse) Repo Rate. The favorable market response drew non-resident capital inflows to domestic financial markets, especially tradable government securities (SBN), thus prompting Rupiah appreciation. Pressures on the Rupiah re-emerged as uncertainty enveloped the global financial markets, which triggered broad USD appreciation. On 18th July 2018, the Rupiah stood at Rp14,405/USD, down 0.52% (ptp) on the level recorded at the end of June 2018. Consequently, the Rupiah has depreciated by 5.81% (ytd) on the level posted at the end of 2017, not as severe as reported in other developing economies, including the Philippines, India, South Africa, Brazil and Turkey. Moving forward, Bank Indonesia will remain vigilant of global financial market uncertainty risks, while maintaining the Rupiah exchange rate in line with the currency’s fundamental value, backed by financial market deepening efforts. The policies remain backed by double intervention strategies and monetary operation strategies to maintain adequate liquidity, especially in the Rupiah and interbank swap markets.”

Inflation (3.5±1 percent) and economic growth (5.1-5.5%) forecasts for 2018 were kept unchanged.


Monday July 16 2018
Indonesia Posts Trade Surplus for 1st Time in 3 Months
Statistics Indonesia l Chusnul Ch Manan| chusnul@tradingeconomics.com

Indonesia recorded a trade surplus of USD 1.70 billion in June of 2018 from a USD 1.67 billion surplus a year earlier and beating market estimates of a USD 0.65 billion surplus. It is the first trade surplus since March, mainly due to a slowdown in imports.

In June, exports increased 11.47 percent from a year earlier to 13 USD billion, below market consensus of a 17.53 percent rise and after an upwardly revised 13.01 percent growth in the prior month. Sales of non-oil and gas products went up by 8.61 percent to 11.28 USD billion, while those of oil and gas jumped by 34.79 percent to 1.72USD billion. There were fewer working days in June due to Eid al-Fitr. 
 
Compared to the previous month, exports tumbled 19.80 percent, as non-oil and gas products decreased sharply by 22.67 percent while sales oil and gas went up by 4.67 percent. By categories, outbound shipments dropped for: machinery/electrical equipment (-27.58 percent); machines/mechanical aircraft (-35.23 percent); vehicles and parts thereof (-36.21 percent); wood, wooden goods (-43.23 percent); rubber and rubber goods (-31.30 percent), and fertilizer (-81.65 percent). In contrast, sales increased for:  mineral fuel (6.11 percent); pulp (13.63 percent); nickel (5.83 percent), and various chemical products (0.65 percent). 

Sales went down to : China (-1.99 percent); the US (-27.90 percent); Thailand (-34.44 percent); Germany (-42.26 percent), Japan (-11.99 percent); Netherlands (-40.31 percent); India (-14.44 percent); Italy (-16.78 percent), and Taiwan (-40.64 percent); Singapore (-32.82 percent); Australia (-30.56 percent); Malaysia (-20.54 percent), and South Korea (-12.01 percent).

Imports increased 12.66 percent to 11.26 USD billion, following an upwardly revised 28.25 percent jump in the prior month and below estimates of a 31.31 percent increase. Purchases of non-oil and gas went up 8.95 percent to 9.14 billion and those of oil and gas jumped by 32.09 percent to 2.11 USD billion.
 
Compared to the prior month, imports tumbled by 36.27 percent. While purchases of non-oil and gas decreased sharply 38.23 percent, those of oil and gas tumbled by 26.11 percent. Imports went down for all categories : raw material (-36.21 percent to 8.51 USD billion); capital goods (-37.81 percent to 1.74 USD billion), and consumption goods (-41.85 percent to 1.01 USD billion).
  
Imports fell from: China (-50.35 percent); Australia (-27.58 percent); Taiwan (-49.77 percent); South Korea (-32.03 percent); Germany (-32.75 percent); Singapore (-10.19 percent); Thailand (-31.68 percent), and Italy (-60.89 percent); the US (-27.67 percent); Japan (-35.63 percent); Malaysia (-42.53 percent); India (-24.46 percent). In contrast, imports rose to Netherlands (73.77 percent).

Considering the first half of 2018, trade balance posted a deficit USD 1.02 billion, swinging from USD 7.67 billion surplus in the same period of 2017, as imports surged 23.10 percent to USD 89.04 billion and exports rose at a slower 10.03 percent to USD 88.02 billion.
 
 
 
 


Friday June 29 2018
Indonesia Hikes Key Interest Rate for 3rd Consecutive Time
Bank Indonesia | Gabriela Costa | gabriela.costa@tradingeconomics.com

The Bank Indonesia raised its benchmark 7-day reverse repo rate by 50 bps to 5.25 percent at its June meeting, while markets were expecting a smaller 25 bps hike. It was the third rate increase in six weeks in an attempt to stabilise the volatile rupiah, which has weakened this month despite the two rate hikes in May.

The lending and the deposit facility rates were also raised by 50bps to 6.0 percent and 4.5 percent respectively.

Excerpts from the Bank Indonesia Press Release:

"The policy raise hike decision is Bank Indonesia’s pre-emptive, front-loading, and ahead of the curve move to maintain the domestic financial market’s competitiveness against several countries’ changing monetary policies as well as high global uncertainty. The policy is still backed by dual intervention policy in the foreign exchange market and government securities (SBN) market as well as the monetary operations strategy to maintain adequate liquidity, particularly in the rupiah money market and interbank swap market. Bank Indonesia is confident that the policy measures will effectively strengthen economic stability, specifically the Rupiah exchange rate stability. Moving forward, Bank Indonesia will continue to monitor the domestic and global economic developments and outlook, to strengthen future policy mix responses.

Rupiah exchange rates defied depreciatory pressures in June 2018, which intensified in the second half of the month as the USD strengthened globally. The rupiah appreciated until the middle of June 2018, hitting Rp13,853/USD on 6th June, in line with Bank Indonesia’s pre-emptive, front-loading and ahead-of-the-curve policy response taken at the end of May 2018. Nevertheless, the more aggressive change in stance adopted by the Federal Reserve at the Federal Open Market Committee (FOMC) meeting in the middle of June, combined with the changing central bank policy response in other countries, specifically in Europe and China, as well as global financial market uncertainty, triggered depreciation nearly all global currencies, including the Rupiah. On 28th June 2018, the rupiah stood at Rp14,390/USD, falling 3.44% (ptp) on the level recorded at the end of May 2018. Compared with conditions at the end of December 2017, the rupiah has fallen 5.72% (ytd), which is less severe than the depreciation experienced in other developing economies, such as The Philippines, India, South Africa, Brazil, and Turkey. Bank Indonesia will remain vigilant of the global financial market uncertainty, while continuing to stabilise the rupiah in line with the currency’s fundamental value and maintaining market mechanisms, backed by financial market deepening efforts.

Inflation (3.5±1 percent) and economic growth (5.1-5.5%) forecasts for 2018 were kept unchanged.


Monday June 25 2018
Indonesia Trade Balance Swings to Deficit in May
Statistics Indonesia l Chusnul Ch Manan | chusnul@tradingeconomics.com

Indonesia posted a trade deficit of USD 1.52 billion in May of 2018, swinging from a USD 0.56 billion surplus a year earlier and missing market estimates of a USD 0.38 billion gap, mainly due to a surge in imports.

In May, imports jumped 28,12 percent to 17.64 USD billion, following an upwardly revised 35.20 percent rise in the prior month and beating estimates of a 13.88 percent increase. Purchases of non-oil and gas surged 23.77 percent to 14.83 billion and those of oil and gas jumped by 57.17 percent to 2.82 USD billion.

Compared to the prior month, imports went up by 9.17 percent. While purchases of non-oil and gas increased 7.19 percent, those of oil and gas rose by 20.95 percent. Imports went up for : raw material (9.02 percent to 13.11 USD billion); capital goods (6.63 percent to 2.81 USD billion), and consumption goods (14.88 percent to 1.73 USD billion).
  
Imports rose from: China (18.62 percent); Australia (19.62 percent); Taiwan (10.38 percent); South Korea (8.79 percent); Germany (2.83 percent); Singapore (7.42 percent); Thailand (25.56 percent), and Italy (50.99 percent). In contrast, imports went down from : the US (-14.81 percent); Japan (-1.29 percent); Malaysia (-5.98 percent); India (-12.90 percent), and Netherlands (-38.27 percent).

Exports increased 12.47 percent from a year earlier to 16.12 USD billion, beating market consensus of a 8.38 percent rise and after an upwardly revised 9.57 percent growth in the prior month. Sales of non-oil and gas products went up by 11.58 percent to 14.55 USD billion, while those of oil and gas jumped by 21.47 percent to 1.57USD billion.
 
Compared to the previous month, exports rose 10.90 percent, as non-oil and gas products increased by 9.25 percent while sales oil and gas surged by 28.80 percent. By categories, outbound shipments rose for: iron and steel (45.67 percent); machinery/electrical equipment (14.79 percent); ore, crust, and metal ash (20.56 percent); knitted goods (38.09 percent), and tins (200.74 percent). In contrast, sales declined for: jewelry/gems (-16.83 percent); pulp (-16.08 percent); animal/vegetables fats and oils (-2.53 percent); rubber and rubber goods (-3.57 percent), and ships (-71.41 percent).  
 
Sales went up to China (15.37 percent); the US (10.03 percent); Thailand (17.56 percent); Germany (25.09 percent), Japan (0.52 percent); Netherlands (25.02 percent); India (8.97 percent); Italy (14.03 percent), and Taiwan (54.47 percent). In contrast, exports fell to : Singapore (-4.91 percent); Australia (-4.53 percent); Malaysia (-3.53 percent), and South Korea (-3.67 percent).
 
Considering the first five months of 2018, trade balance posted a deficit USD 2.83 billion, swinging from USD 6 billion surplus in the same period of 2017, as imports surged 24.75 percent to USD 77.77 billion and exports rose at a slower 9.65 percent to USD 74.93 billion.
 

 
 
 
 
 
 


Wednesday May 30 2018
Indonesia Hikes Key Rate for Second Time in 2 Weeks
Bank Indonesia | Gabriela Costa | gabriela.costa@tradingeconomics.com

The central bank of Indonesia increased its benchmark 7-day reverse repo rate by 25bps to 4.75 percent at an out-of-cycle meeting on May 30th 2018. It was the first extra policy meeting since 2014 and the second rate hike in two weeks, as the central bank seeks to support the falling rupiah and strengthen stability. Policymakers said overall economic conditions in Indonesia are strong although geopolitical risks, global uncertainty and prospects of rate hikes in the US have been adding pressure.

The lending and the deposit facility rates were also increased by 25bps to 5.5 percent and 4 percent respectively.

Excerpts from the Bank Indonesia Press Release:

"The decision to raise policy rate is part of Bank Indonesia’s short term policy, which prioritise stability in monetary policy, especially for the Rupiah exchange rate. First, a pre-emptive, ahead-of-the-curve and front-loading policy rate response will be taken to stabilise the rupiah exchange rate. Second, Bank Indonesia will continue to optimise dual intervention in the foreign exchange market and government securities market to stabilise rupiah exchange rates, adjust fair prices in the financial markets and maintain adequate liquidity in the money market. Third, the monetary operations strategy will be oriented towards maintaining adequate liquidity in the rupiah money market and interbank swap market. Fourth, intensive communication with market players, the banking industry, business community and economists will be used to form rational expectations, thus helping to mitigate the rupiah overshooting the currency’s fundamental level.

The pressures on stability, particularly in the Rupiah exchange rate, tend to originate from policy change in the United States (US) which affects all countries, including Indonesia. Global financial market uncertainty has also escalated, triggered by the looming US-China trade war, coupled with simmering regional geopolitical tensions. Prevailing global developments have prompted a foreign capital outflow and amplified pressures on financial markets in advanced economies and emerging market economies (EMEs), including Indonesia, manifesting in lower stock prices, higher bond yields and exchange rate depreciation against the US dollar."

Nevertheless, domestic economic growth remains strong, backed by increasing investment in buildings and non-construction sectors. Also, the current account deficit narrowed from the previous quarter, and is expected to remain below 2.5 percent of the GDP in 2018.

Inflation forecasts (3.5±1 percent) for 2018 were kept unchanged.


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.