• World Bank Drastically Cuts Indonesia’s 2015 Economic Growth Forecast

    The World Bank cut its forecast for economic growth in Indonesia in 2015 from 5.2 percent year-on-year (y/y) to 4.7 percent (y/y) as private consumption, which accounts for about 55 percent of total economic growth in Indonesia, is estimated to weaken further in the second half of 2015 while government spending has been lower than expected (causing subdued fixed investment). Furthermore, persistent low commodity prices and tighter credit conditions provide further pressures that led to the extreme downward revision.

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  • Indonesia AirAsia: Shares of AirAsia Berhad Plunge after Suspension Threat

    After Indonesian authorities threatened to suspend the operating license of the Indonesian unit (Indonesia AirAsia) of Malaysia’s budget carrier AirAsia, shares of the latter (AirAsia Berhad) on the Kuala Lumpur Stock Exchange plunged over 12 percent on Wednesday morning (08/07). Indonesia AirAsia is among 13 Indonesian airlines that were found to have negative equity and were ordered by the Indonesian Transportation Ministry to turn this positive before 31 July 2015 in order to retain their operating licenses.

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  • Indonesia’s Foreign Exchange Reserve’s Continue to Decline

    Indonesia’s foreign exchange reserves fell USD $2.8 billion to USD $108.0 billion at the end of June 2015 (from USD $110.8 billion one month earlier). This fall was caused by foreign debt repayment and the use of foreign exchange to stabilize the rupiah exchange rate. Due to external pressures (particularly looming further monetary tightening in the USA this year and the possible Greek exit from the euro), the rupiah is the worst performing Asian currency tracked by Bloomberg so far in 2015, weakening about 7 percent against the US dollar.

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  • Asian Development Bank Less Positive about the Indonesian Economy in 2015

    The Asian Development Bank (ADB) has revised its economic growth forecast for Indonesia in 2015 from 5.2 percent year-on-year (y/y) to 5 percent (y/y). During a press conference on Tuesday (07/07) in Jakarta, Edimon Ginting, Deputy Country Director for Indonesia of the Philippines-based ADB, said that there are three reasons that explain why the ADB has become less optimistic about Indonesia’s gross domestic product (GDP) growth in 2015. Last year, Indonesia’s economic growth slowed to a five-year low of 5.02 percent (y/y).

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