Good news for Indonesian manufacturers. The Nikkei Indonesia Manufacturing Purchasing Managers' Index (PMI) recorded a second consecutive month of growth, touching a 10-month high of 51.2 in April 2017 (from a reading of 50.5 in the preceding month), as further expansion in order books encouraged local companies to boost production, while the relatively weaker rupiah rate (versus the US dollar) exerted upward pressure on input prices, with cost inflation reaching an 18-month peak. Subsequently, output prices rose at an accelerated pace.

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The central bank of Indonesia (Bank Indonesia) expects the nation's gross domestic product (GDP) growth to be below earlier estimates in both the first and second quarters of 2017. However, the lender of last resort remains optimistic that Indonesia's full-year economic growth can reach a pace of 5.2 percent year-on-year (y/y), accelerating from 5.02 percent (y/y) in the preceding year.

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On 30 April 2017, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website over the last seven days. Most of the topics involve economy-related such as foreign direct investment realization in Q1-2017, the possible impact of Trump's tax reforms on the Indonesian economy, monetary policy, the tire manufacturing, bilateral trade, and more.

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Following the announcement last year, the central bank of Indonesia (Bank Indonesia) has again stated that it is to ease the minimum statutory reserves (in Indonesian: giro wajib minimum) regulations for conventional local banks (both for rupiah and foreign-denominated currencies). With this looser approach, banks can manage their liquidity more effectively, which should lead to reduced volatility on the overnight money market ("interest rate buffer").

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