Thursday March 16 2017
Indonesia Leaves Monetary Policy Unchanged
Bank of Indonesia | Chusnul Ch Manan | chusnul@tradingeconomics.com

Indonesia's central bank kept its benchmark interest rate on hold at 4.75 percent at its March 16th meeting, as widely expected. Policymakers said the decision was in line with efforts to maintain macroeconomic and financial stability amid increasing global uncertainty. The overnight deposit facility rate and the lending facility rate were also left on hold at 4.0 percent and 5.5 percent respectively.

Excerpts from Bank Indonesia Press Release: 

The decision is consistent with Bank Indonesia’s efforts to maintain macroeconomic and financial system stability amidst growing global uncertainty. Bank Indonesia continues to monitor and remains vigilant of various short term risks, both global and domestic. Global risks include rising global inflation, US economic and trade policy direction and Fed Fund Rate hike effects, as well as geopolitical risks from Europe. Domestically, the impact of administered prices (AP) on inflation still needs to be monitored. Therefore, Bank Indonesia constantly optimises its monetary, macroprudential and payment system policy mix to preserve macroeconomic and financial system stability. Furthermore, Bank Indonesia will continue to strengthen coordination with the Government, focusing on controlling inflation within the target corridor as well as accelerating structural reform programs to support sustainable economic growth.

Economic growth is expected to continue improving, despite a number of risks that need to be observed.  Indonesia’s economy is predicted to remain strong in the first quarter of 2017, compared to the previous quarter, driven stronger investment, robust consumption and improving export performance. Non-building investment is predicted to gain traction, reflected by an uptick in sales of heavy equipment and cement. Household consumption is expected to continue increasing as indicated by a stable retail growth and positive consumer expectations. Meanwhile, government’s contribution towards consumption and investment tend to improve. Externally, export performance is predicted to improve as commodity prices increase. Consequently, the Indonesian economy is projected to grow in the 5.0-5.4% (yoy) range in 2017.

The rupiah continued to appreciate in February 2017 in line with maintained macroeconomic stability and despite a backdrop of growing global uncertainty. Moving forward, Bank Indonesia will remain vigilant of emerging risks, including the US economic policy and the impact of FFR hikes as well as political uncertainty in several European countries. Therefore, Bank Indonesia will continue to implement the stabilisation measures necessary to ensure the rupiah remains consistent with the currency’s fundamental value, while maintaining market mechanisms.

Looking forward, Bank Indonesia will strengthen policy coordination with the Government to control inflation in response to several risks, including further adjustments to administered prices (AP) as the Government continues to reform energy subsidies as well as inflationary pressures on volatile foods. With that strategy, inflation is projected to remain within the target corridor of 4±1%.
 




Wednesday March 15 2017
Indonesia Trade Surplus Widens In February
Statistic of Indonesia l Chusnul Ch Manan| chusnul@tradingeconomics.com

Indonesia posted a trade surplus of 1.31 USD billion in February of 2017, compared to a 1.14 USD billion surplus a year earlier and above market estimates of a 1.2 USD billion surplus. Considering January to February, the goods surplus was recorded 2.75 USD billion, exports rose by 19.20 percent compared to the same period a year earlier to 25.98 USD billion while imports increased 12.51 percent to 23.22 USD billion.

Year-on-year exports from Indonesia increased 11.16 percent from a year earlier to 12.57 USD billion in February of 2017, compared to a 27.71 percent rise in January and slower than market estimates of a 15.19 percent growth. It was the fifth straight month of increase, as sales of non-oil and gas products went up 11.55 percent to 11.38 USD billion while those of oil and gas rose by 7.62 percent to 1.20 USD billion.
 
Imports went up 10.61 percent to 11.26 USD billion in February of 2017, following a 14.54 percent growth in a month earlier while markets expected a 13.00 percent gain. It was the fifth consecutive month of increases, as purchases of oil and gas jumped 116.04 percent to 2.43 USD billion while those of non-oil and gas fell 2.46 percent to 8.83 USD billion.
 
Compared to the previous month, exports decreased 6.17percent, as non-oil and gas products dropped by 6.21 percent while sales oil exports fell by 5.78 percent. By categories, outbound shipments rose for: rubber and rubber goods (6.80 percent), vehicles & parts (5.58 percent), organic chemicals (17.04 percent), product pharmaceutical industry (84.38 percent) and goods from iron & steel (21.22 percent), and jewelry, gems (+105.20 percent).In contrast, sales decreased for:  apparel not knitted (-8.52 percent), ore, cruct and gray metal (-99.12 percent), mineral fuels (-17.91 percent), iron & steel -25.82 percent), fats and oil of animal/vegetables(-9.14 percent), and copper (-41.30 percent).
 
Sales went up to the ASEAN countries (1.85 percent). In contrast, exports fell to most of the country's trading partnes :  the EU (-5.98 percent), Japan (-18.57 percent), China (-12.42 percent), the US (-4.92 percent), South Korea (-5.80 percent), and Taiwan (-14.64 percent), India (-22.73 percent), and Australia (-2.32 percent).
 
Compared to the prior month, inbound shipments declined by 5.96 percent. While purchases of non-oil and gas went down 12.93 percent, those of oil and gas increased by 32.71 percent. Imports went down the most for consumption goods (-13.18 percent to 0.87 USD billion), followed by capital goods (-11.32 percent to 1.70 USD billion), and raw material (-4.02 percent to 8.68 USD billion).
 
In January 2017, trade surplus was upwardly revised to 1.43 USD billion




Thursday February 16 2017
Indonesia Holds Key Policy Rate At 4.75%
Bank Indonesia Chusnul Ch Manan| chusnul@tradingeconomics.com

Indonesia's central bank kept its benchmark interest rate on hold at 4.75 percent at its February 16th meeting, as expected. Policymakers said the decision was in line with efforts to supports economic growth. Bank Indonesia also left its overnight deposit facility rate and lending facility rate unchanged at 4.0 percent and 5.5 percent respectively.

 
Excerpts from Bank Indonesia Press Release: 
 
The decision is consistent with Bank Indonesia’s efforts to maintain macroeconomic and financial system stability, while preserving domestic economic recovery momentum. Congruent with the global economic improvements, stronger economic growth in Indonesia is expected, with maintained macroeconomic and financial system stability at home. Nevertheless, Bank Indonesia shall remain vigilant of global risks in the form of US policy direction and geopolitical risks in Europe, as well as domestic risks linked to the impact of administered prices (AP) on inflation. To that end, Bank Indonesia will constantly seek to optimise its monetary, macroprudential and payment system policy mix in order to maintain macroeconomic and financial system stability. Furthermore, Bank Indonesia will also strengthen policy coordination with the Government, focusing on controlling inflation within the target corridor as well as ongoing structural reforms to support sustainable economic expansion.

Bank Indonesia projects economic growth in 2017 at 5.0-5.4% (yoy), on the back of strong private consumption, increase in government consumption, and improvements in both private and government investments. Export growth is expected to increase, coupled with increasing imports due to domestic demand.

After suffering in the fourth quarter of 2016, the rupiah relatively stabilized with a tendency to strenghten amid uncertainty regarding policy direction in the United States. In the fourth quarter of 2016, point-to-point, the rupiah depreciated 3.13% (ptp) to a level of Rp13,473 per USD. Bank Indonesia will continue to monitor global financial uncertainty, while instituting measures to stabilise the rupiah in line with the currency’s fundamental value and maintaining market mechanisms.

Inflation remained under control, despite the slight bump recorded at the beginning of 2017. Administered prices (AP) and core inflation pushed CPI inflation to 0.97% (mtm) in January 2017, accelerating from 0.42% (mtm) the month earlier. Meanwhile, inflationary pressures on volatile foods (VF) were controlled and low, along with various food price corrections. The government raised administered prices (AP) through higher administration price to extend vehicle registrations as well as more expensive electricity rates and special fuel prices. Core inflation was controlled at 0.56% (mtm) or 3.35% (yoy) despite a moderate increase. Bank Indonesia will continue to strenghten coordination with the government to control inflation, specifically in the face of several risks stemming from administered prices, as the government reforms energy subsidies, as well as the risk of rising volatile food prices. With these steps, Bank Indonesia predicts inflation within the target corridor for 2017, namely 4±1%.
 
 
 


Thursday February 16 2017
Indonesia Trade Surplus Largest In 3 Years In January
Statistic of Indonesia l Chusnul Ch Manan | chusnul@tradingeconomics.com

Indonesia posted a trade surplus of 1.39 USD billion in January of 2017, compared to a 13.6 USD million surplus a year earlier and above market estimates of a 0.85 USD billion surplus. It was the largest surplus since December 2013, as exports rose much more than imports.

Year-on-year, exports from Indonesia jumped 27.71 percent from a year earlier to 13.38 USD billion in January of 2017, compared to a 15.57 percent rise in December 2016 while market estimated a 21.73 percent growth. It was the fourth straight month of increase and the fastest since September 2011, as sales of non-oil and gas products went up 29.24 percent to 12.11 USD billion while those of oil and gas rose by 14.77 percent to 1.27 USD billion
 
Imports went up 14.54 percent to 11.99 USD billion, following a 5.82 percent growth in a month earlier while markets expected a 13.88 percent gain. It was the fourth consecutive month of increases, as purchases of non-oil and gas rose 10.12 percent to 10.18 USD billion while those of oil and gas increased 48.03 percent to 1.81 USD billion.

Compared to the previous month, outbond shipment decreased 3.21 percent, as non-oil and gas products dropped by 3.70 percent while sales oil exports increased by 1.72 percent. By categories, outbound shipments rose for: mineral fuels (0.58 percent), rubber and rubber goods (10.55 percent), iron & steel (21.22 percent), vehicles & parts (7.93 percent), machinery/aircraft mechanics (7.23 percent) and goods from iron & steel (21.22 percent). In contrast, sales decreased for:  jewelry, gems (-14.71 percent), apparel not knitted (-8.82 percent), and ore, cruct and gray metal (-27.56 percent)
 
Sales went up to India (42.91 percent). In contrast, exports fell to most of the country's trading partnes : the ASEAN countries (-12.62 percent), the EU (-4.44 percent), Japan (-6.75 percent), China (-17.52 percent), the US (-2.13 percent), South Korea (-10.53 percent), and Taiwan (-11.65 percent).
 
Compared to the prior month, inbound shipments decreased by 6.21 percent. While purchases of non-oil and gas went down 8.12 percent, those of oil and gas increased by 6.25 percent. Imports went up the most for raw material (20.92 percent to 9.06 USD billion), followed by capital goods (6.04 percent to 1.92 USD billion). In contrast, purchases decreased for consumption goods (-13.39 percent to 1 USD billion).
 



 


Monday February 06 2017
Indonesia Economy Contracts 1.77% QoQ in Q4
Statistic of Indonesia | Chusnul Ch Manan | chusnul@tradingeconomics.com

Indonesia's GDP shrank 1.77 percent quarter-on-quarter in the fourth quarter of 2016, compared to a downwardly revised 3.13 percent growth in the September quarter. It was the first contraction in three quarters and in line with markets estimates of a 1.8 percent decrease, as private consumption stalled while investment rose further and government spending and exports rebounded.

In the December quarter, private consumption was nearly flat (-0.02 percent), compared to a 3.45 percent rise in the preceding three months. Private non-profit spending advanced 2.83 percent (4.26 percentin the previous period). Government spending surged 39.49 percent (-0.19 percent) and investment rose 4.56 percent (3.52 percent). Exports went up 8.93 percent (-3.64 percent) and imports jumped 12.67 percent (-5.09 percent). 

On the production side, agriculture decreased the most by 21.24 percent (+4.67 percent in the previous period), followed by finance and insurance sector (-0.81 percent from 2.79 percent), manufacturing (-0.69 percent from 0.83 percent), whole sale and retail trade (-0.40 percent from 1.39 percent). In contrast, growth was seen for: mining & quarrying (2.18 percent from 0.58 percent in the previous period), electricity and gas (4.17 percent from -2.12 percent),  other services (1.97 percent from 1.95 percent), information and communication (1.74 percent from 2.84 percent), business service (1.62 percent from 1.56 percent), water and waste management (1.22 percent from 0.45 percent), transport & storage (1.10 percent from 5.39 percent), real estate (0.41 percent from 0.45 percent), education services (10.74 percent from -1.28 percent), healthcare (6.91 percent from 0.63 percent) and government administration (6.67 percent from 1.66 percent).

Year-on-year, the economy expanded 4.94 percent, compared to a downwardly revised 5.01 percent growth in the September quarter while market estimated a 5.07 percent expansion. It was the slowest growth since the March quarter.




Monday February 06 2017
Indonesia GDP Growth Slowest In 3 Quarters In Q4
Statistics of Indonesia | Chusnul Ch Manan | chusnul@tradingeconomics.com

The Indonesian economy expanded 4.94 percent year-on-year in the December quarter of 2016, compared to a marginally revised 5.01 percent growth in the third quarter while market estimated a 5.07 percent expansion. It was the slowest growth since the March quarter, as a slowdown in private consumption and a further decline in government spending offset a rebound in exports and a faster increase in investment.

In the fourth quarter, private consumption expanded by 4.99 percent year-on-year, slower than a 5.01 percent growth in the preceding quarter. Government spending fell by 4.05 percent, faster than a 2.95 percent decline in the September quarter. Gross fixed capital formation grew by 4.80 percent, compared to a 4.24 percent rise in the previous three months. Private non-profit expenditure expanded by 6.72 percent, as compared to a 6.64 percent growth in the preceding quarter. Exports increased by 4.24 percent, shifting from a 5.65 contraction in previous quarter. Imports also rose by 2.82 percent, after registering a 3.67 percent decline. 
 
On the production side, growth eased for most sectors: other services (7.69 percent from 7.71 percent in the prior quarter), business services (6.83 percent from 6.95 percent), hotel and restaurants (4.47 percent from 4.68 percent), construction (4.21 percent from 4.95 percent), finance (4.18 percent from 9.04 percent), healthcare (4.10 percent from 4.49 percent), real estate (3.65 percent from 3.97 percent), manufacturing (3.36 percent from 4.52 percent), electricity and gas (3.14 percent from 4.88 percent) and government administration (0.27 percent from 3.80 percent). In contrast, activities rose at a faster pace for information (9.57 percent from 8.95 percent); agriculture (5.31 percent from 3.03 percent), wholesale (3.90 percent from 3.59 percent), education (3.12 percent from 1.95 percent), water and waste management (2.66 percent from 2.36 percent) and mining (1.60 percent from 0.29 percent).

On a quarter-on-quarter basis, the economy shrank 1.77 percent, following a downwardly revised  3.13 percent growth in the September quarter. It was the first contraction in three quarters and in line with markets estimates of a 1.80 percent decline.

Considering full 2016, the GDP grew by 5.02 percent, compared to an upwardly revised a 4.88 percent in 2015 and slightly below market expectations of a 5.03 percent expansion.
 




Thursday January 19 2017
Indonesia Leaves Monetary Policy Unchanged
Bank Indonesia | Joana Taborda | joana.taborda@tradingeconomics.com

The central bank of Indonesia left its key interest rate on hold at 4.75 percent on January 19th 2017 as widely expected, aiming to protect against global financial risks including capital outflows and inflationary pressures from higher food and utility prices. Policymakers also kept its lending facility rate unchanged at 5.5 percent and its overnight deposit facility rate at 4.0 percent.

Excerpts from Bank Indonesia Press Release: 

The decision was consistent with Bank Indonesia’s effort to maintain macroeconomic and financial system stability, while keep optimizing domestic economic recovery amid uncertainties in the global financial market. After performing relatively well throughout 2016, improvement in the national economic outlook is expected to continue, with stronger growth combined with maintained macroeconomic and financial system stability. Bank Indonesia will continue to monitor risks in 2017. Globally, the risks include the policy directions taken in the US and China and global oil price hike, while the domestic risks are linked to the impact of administered prices (AP) on inflation. Consequently, Bank Indonesia will continue to optimise its monetary, macroprudential and payment system policy mix in order to maintain macroeconomic and financial system stability, while considering the impact on the optimilization of economic recovery. Furthermore, Bank Indonesia will strengthen policy coordination with the Government, focusing on inflation control to keep within the target range, as well as structural reforms to support sustainable economic growth.

Bank Indonesia predicts the global economy to improve, supported by gains in the US and China, albeit several risks that need to be observed. Looking forward, several global risks shall continue to demand vigilance, including the impact of US fiscal and international trade policy, Federal Funds Rate (FFR) hikes that could raise the cost of borrowing, economic and financial rebalancing in China, as well as geopolitical risks.

In 2017, however, the economic recovery should continue, driven by exports and investment as financing increases from bank loans and nonbank financing. On the other hand, stable household consumption is also predicted.

After pressures following the result of the US election, the rupiah appreciated in December as capital flowed back onto domestic financial markets. Point-to-point, the rupiah appreciated 0.59% (mtm) to close at a level of Rp13,473 per USD in line with a deluge of capital inflow, primarily to government debt securities (SUN). In contrast, outflow from the domestic stock market decreased after the FFR hike, with a reversal noted at the end of December 2016 to record an inflow. Point-to-point, in 2016, the rupiah appreciated 2.32% (ytd) on the positive investor perception of the domestic economic outlook, which attracted non-resident capital. Bank Indonesia will remain vigilant of risks from the global financial uncertainty, however, while continuing to stabilise the rupiah in line with the currency’s fundamental value and maintaining market mechanisms.

Bank Indonesia maintained low inflation throughout 2016, towards the floor of the inflation target, namely 4±1%. CPI inflation in December 2016 was recorded at 0.42% (mtm), down from 0.47% (mtm) the month earlier. Therefore, inflation of 3.02% (yoy) was recorded for the year. Low inflation was supported by low core inflation and minimal administered prices, while inflationary pressures on volatile foods remained. Such achievements were supported by Bank Indonesia policy and increasingly solid coordination with the central and local governments to control inflation. Moving forward, efforts to control inflation will confront risks that demand vigilance, primarily in the form of administered prices adjustments along with government’s structural reform policies in energy subsidies, as well as risks of volatile food inflation. To that end, policy coordination between Bank Indonesia and the Government will constantly be strengthened.


Monday January 16 2017
Indonesia Trade Balance Swings to Surplus in December
Statistics Indonesia l Rida Husna | rida@tradingeconomics.com

Indonesia posted a trade surplus of 0.99 USD billion in December of 2016, compared to a 0.16 USD billion deficit a year earlier. Figure came above market estimates of a 0.84 USD billion surplus, as exports rose much more than imports.

Year-on-year, exports jumped 15.57 percent to 13.77 USD billion, following a 21.34 percent in the prior month and beating market consensus of a 13.27 percent rise.  It was the third straight month of increase, as sales of non-oil and gas products went up 18.11 percent to 12.54 USD billion while those of oil and gas dropped by 5.22 percent to 1.10 USD billion.  

Imports went up 5.82 percent to 12.78 USD billion, following a 9.88 percent growth in a month earlier while markets expected a 3.5 percent growth. It was also the third consecutive month of growth, as purchases of non-oil and gas rose 7.91 percent to 11.09 USD billion while those of oil and gas fell 6.15 percent to 1.69 USD billion. 

Compared to the previous month, outbound shipments rose 1.99 percent, as oil exports increased by 11.66 percent, followed by sales of non-oil and gas products (+1.13 percent). By categories, outbound shipments rose for: mineral fuels (+9.06 percent), rubber and rubber goods (+14.81 percent), apparel not knitted (+22.03 percent); ore, cruct and gray metal (+29.19 percent) and iron & steel (+44.82 percent). In contrast, sales decreased for: machinery/electrical equipment (-10.44 percent); jewelry, gems (-32.0 percent), vehicles & parts (-17.26 percent), machinery/aircraft mechanics (-8.30 percent) and goods from iron & steel (-28.52 percent). Sales went up to most of the country's trading partners: the ASEAN countries (+4.24 percent), the EU countries (+6.94 percent), China (+2.82 percent), the US (+8.88 percent), South Korea (+26.06 percent) and Taiwan (+5.72 percent). In contrast, exports fell to Japan (-3.98 percent), India (-13.58 percent) and Australia (-32.66 percent).

Compared to the prior month, inbound shipments increased by 0.88 perent. While purchases of non-oil and gas rose 1.35 percent, those of oil and gas declined by 2.13 percent. Imports went up the most for consumption goods (+27.25 percent to 1.31 USD billion, followed by capital goods (+7.49 percent to 2.23 USD billion). In contrast, purchases of raw material declined by 3.38 percent to 9.25 USD billion.

Considering full year of 2016, exports fell 3.95 percent from a year earlier to 144.43 USD billion while imports declined by 4.94 percent to 135.65 USD billion. That brought a trade surplus of 8.78 USD billion during the period, larger than a 7.67 USD billion surplus recorded in 2015.


Thursday December 15 2016
Indonesia Trade Balance Swings to Surplus in November
Statistics of Indonesia l Chusnul Ch Manan| chusnul@tradingeconomics.com

Indonesia posted a trade surplus of 0.84 USD billion in November of 2016, reversing from a 0.4 USD billion deficit a year earlier. Figure came slightly above market estimates of 0.82 USD billion surplus, as exports rose much more than imports.

Year-on-year,  exports jumped 21.34 percent to 13.50 USD billion, compared to a 4.60 percent rise in October and beating market consensus of a 10.0 percent growth. It was the fastest growth since September 2011, as sales of non-oil and gas products went up 28.75 percent to 12.39 USD billion, those of oil and gas dropped by 26.32 percent to 1.10 USD billion.
 
Imports increased by 9.88 percent  to 12.66 USD billion, following a 3.27 percent gain in the prior month while market expected a 0.1 percent rise. It was the second straight month of increase, as purchases of non-oil and gas rose 10.31 percent to 10.90 USD billion and those of oil and gas increased by 7.27 percent to 1.76 USD billion.
 
Compared to the previous month, outbound shipments rose 5.91 percent. While sales of non-oil and gas products went up 28.75  percent to 12.39 USD billion, those of oil and gas dropped by 26.32 percent to 1.10 USD billion. Sales rose to most of the country's trading partners : the US (+13.22 percent), the EU countries (+9.92 percent), India (+8.81 percent), China (+5.85 percent), Japan (+13.22 percent), the ASEAN countries (+0.18 percent), South Korea (+2.41 percent) percent) and Taiwan (+18.28 percent).
 
Compared to a month earlier, imports went up 10.00 percent, led by machinery and electrical equipment (+15.23 percent), machinery and mechanical equipment (+8.34 percent) and optical equipment (+39.73 percent). Imports rose for all categories: consumption goods (+7.32 percent to 1.03 USD billion), raw materials (+11.63 percent to 9.56 USD billion) and capital goods (+4.23 percent to 2.07 USD billion).
 
In October 2016, trade surplus was marginally revised to 1.24 USD billion.

From January to November 2016, trade surplus was recorded at 7.80 USD billion, compared to a 7.83 USD billion surplus in the same period a year earlier.


Thursday November 17 2016
Indonesia Keeps Key Rate Unchanged at 4.75%
Bank Indonesia l Aloysius Unditu | aloy@tradingeconomics.com

The Bank Indonesia held its key interest rate steady at 4.75 percent at its November meeting as expected after two-25bps cuts in the previous two months. The central bank also kept its lending facility rate unchanged at 5.5 percent and its overnight deposit facility rate at 4.0 percent. Policymakers said the decision was taken in their response to maintain domestic economic growth.

The central bank mentioned an 'escalating' global economic uncertainty in global financial markets after the US election and said that it will continue to intervene in the foreign exchange market to keep rupiah stable against the dollar. The rupiah weakened sharply after presidential elections in the US due to capital outflows but stabilized after the central bank intervention.

Going forward, poliymakers said the Indonesian economy is expected to expand 5 percent this year and between 5 percent to 5.4 percent next year and inflation is seen in the range of 3 percent to 5 percent in 2017.