On Thursday (07.09.2023) Indonesia Investments released the August 2023 edition of its monthly report. The report discusses a selection of key economic, political and social developments that were relevant in Indonesia in the month of August 2023.
What do we discuss in this August 2023 report?
First of all, we have seen a significant increase in global prices of rice, with the main reason being that India (the world's biggest rice supplier) decided to ban exports of certain rice types. India felt the need to impose this ban amid the rising impact of the El Nino weather phenomenon in the second half of 2023 (bringing dryer than usual weather, which is negative for agriculture).
The threat now is that other key rice suppliers are also curtailing rice exports to safeguard domestic rice supplies (which is about the same scenario that we saw during the 2007-2008 global rice crisis).
What about the impact on Indonesia? Well, Indonesia does still regularly import rice (despite striving to achieve rice self-sufficiency), primarily to stabilize its rice stocks that are managed by state agency Bulog, and can instantly be distributed in case of shortages or inflationary pressures. And therefore it will certainly be affected when global rice supplies dry up (and prices increase). After all, rice is the key staple food for Indonesians.
Secondly, we focus on Indonesia's crude oil sector. Despite the Indonesian government aiming to reach net zero emissions by 2060, it still has high hopes for national oil and fuel production in the next couple of decades. In fact, by 2030 it targets to produce one million barrels of oil per day (which probably is a too ambitious goal). In this article we discuss Indonesia's (ever-sliding) oil production, the lack of enough refining (processing) facilities, troubles in the investment environment, and government ambitions/programs.
Thirdly, we offer an in-depth analysis of the second quarter gross domestic product (GDP) data that were released in early August 2023. The data show something very positive: Indonesia's economy expanded by 5.17 percent (y/y) in Q2-2023, thus beating expectations, particularly supported by household consumption (unfortunately, the contribution of exports is sliding amid normalizing international commodity prices and weakening global economic growth).
As usual, we also offer in-depth updates on inflation, trade and manufacturing as these all give important clues about the state of the Indonesian economy.
Lastly, something that might be interesting for our foreign (non-Indonesian) subscribers, we offer an update on recent changes made to the legal framework for foreigners buying property in Indonesia. Although it remains complex (and risky) for foreigners to buy property in Indonesia, the government did open the door a bit wider (we emphasize, however, that foreigners can still not own land in Indonesia).
The August 2023 report (an electronic report) can be ordered by sending an email to firstname.lastname@example.org or a message to +62.882.9875.1125 (including WhatsApp).
Price of this report: