Supported by legislative and presidential elections, car sales in Indonesia are expected to grow between five and ten percent to 1.30 million total vehicles in 2014. These elections are estimated to boost the domestic money flow due to increased economic activity in Southeast Asia's largest economy. Consumption goods such as cars and food & beverage products are expected to feel the impact of this development and may offset the negative impact brought on by the weak rupiah, high inflation and the high interest rate environment.

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On Thursday (02/01), Statistics Indonesia (BPS) released the December 2013 inflation figure of Indonesia as well as the calender inflation rate for full-year 2013. Higher food prices and house prices were the main contributors to the 0.55 percent inflation rate in December 2013. Seasonal celebrations, like Christmas and New Year, always translate into higher inflationary pressures in Southeast Asia's largest economy. Higher fuel prices were the main contributor to the 8.38 percent inflation rate in full-year 2013.

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Ahead of the new year, the Indonesia rupiah exchange rate continues its downward trend on Monday (30/12). Bank Indonesia's Jakarta Interbank Spot Dollar Rate (JISDOR) fell to IDR 12,270 per US dollar from IDR 12,260 on the previous trading day. Due to the improving US economy, the US dollar keeps appreciating against the majority of emerging currencies. At most local Indonesian banks, the rupiah is traded significantly above the psychological level of IDR 12,000 per US dollar.

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The central bank of Indonesia (Bank Indonesia) expects that the country’s inflation figure in December 2013 (month-to-month) will be below 0.5 percent. Up to the third week of December, inflation increased 0.36 percent according to data from Bank Indonesia. Considering the month of December always brings along inflationary pressures due to seasonal celebrations (Christmas and New Year), Bank Indonesia's inflation estimate of below 0.5 percent can be considered rather low.

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The DBS Bank expects that Indonesia's inflation rate will reach 8.2 percent (year-on-year) by the end of 2013, supported by a low monthly inflation rate in the last month of the year. The DBS Bank believes that the pace of inflation in December 2013 will be slightly higher than the country's November inflation (0.12 percent). In the period January to November 2013, inflation in Southeast Asia's largest economy has accumulated to 7.79 percent (yoy). The bank also stated that it expects inflation to reach 6.7 percent in full-year 2014.

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Deputy Trade Minister Bayu Krisnamurthi said that the Indonesian government is preparing two strategic steps to anticipate the negative impact of the winding down of the Federal Reserve's quantitative easing program. In January 2014, the Fed's bond-buying program will be reduced from USD $85 billion to USD $75 billion per month. The two strategic steps, which will enhance financial stability in Southeast Asia's largest economy, involve the curtailing of Indonesia's current account deficit and high inflation.

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Indonesia's Finance Minister Chatib Basri expects that Indonesia's economic growth in 2013 will reach 5.7 percent, significantly below the government's initial target of 6.3 percent. Basri announced his expectation at the government's economic evaluation and projection meeting. According to Basri, Indonesia's economic growth is stable, despite its slowing trend. Among the G20 member countries, only China will post higher GDP growth (7.8 percent up to the third quarter). Indonesia's inflation rate is expected to reach 8.5 percent (yoy) at the year-end.

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Various analysts believe that the benchmark stock index of Indonesia (the Jakarta Composite Index or IHSG) can make a good jump in 2014 to the level of between 5,000 to 5,300 points (from 4,182 currently) despite the looming end of the Federal Reserve's quantitative easing program (QE3) which may result in temporary capital outflow from Indonesia's capital markets. The analysts believe that positive internal developments will provide solid support for the IHSG. These developments include the trade balance, rupiah exchange rate and general elections.

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Head of the Indonesia Investment Coordinating Board (BKPM), Mahendra Siregar, is optimistic that total realized investments in Indonesia will exceed the target that is set for this year. The BKPM, a government institution, aims for investments worth of IDR 390 trillion (USD $32.5 billion) in 2013 and IDR 470 trillion (USD $39.2 billion) in 2014. Siregar is optimistic because many investors, particularly from Japan and the USA, are committed to engage in business expansion at the end of this year as well as next year.

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In Bank Indonesia's Board of Governors' meeting - held on Thursday (12/12) - it was decided to keep the country's benchmark interest rate (BI rate) at 7.50 percent. Executive Director of Bank Indonesia's Communication Department Difi A. Johansyah said that the current rate of 7.50 percent is in line with the institution's inflation target of 4.5 percent (plus or minus one percent). The lending facility and deposite facility (Fasbi) rates are also maintained at 7.5 percent and 5.75 percent respectively.

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Today (22/10), the World Bank released the October 2015 edition of its flagship Indonesia Economic Quarterly, titled "In Times of Global Volatility". In the report the World Bank states that despite current ongoing global uncertainties (caused by looming monetary tightening in the USA and China's economic slowdown), which make macroeconomic management difficult in the year ahead, pro-active government action could offset the negative impact and may help to boost growth.

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Indonesia's heavily depreciated rupiah makes it more difficult for Indonesians to study abroad or to send their children to universities abroad without having the financial aid in the form of a scholarship. For those that are thinking of making such a decision, they need to take into account the performance of the Indonesian rupiah as well as the inflation outlook in the country of destination. So far in 2015, the Indonesian rupiah has depreciated 18 percent against the US dollar, 9 percent against the euro, 14 percent against China's yuan, and 2.4 percent against the Australian dollar.

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The central bank of Indonesia announced on Thursday (17/09) that it the country’s key interest rate (BI rate) at 7.50 percent, while maintaining the deposit facility rate at 5.50 percent and the lending facility rate at 8.00 percent. According to Bank Indonesia (BI) this decision is consistent with its efforts to push inflation towards the target corridor of 4±1 percent in both 2015 and 2016. In addition, the decision is also part of Bank Indonesia’s measures to anticipate possibilities of a Fed Fund Rate (FFR) hike.

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Jumlah orang miskin di Indonesia meningkat. Menurut data terakhir dari Badan Pusat Statistik (BPS), yang diterbitkan hari ini (15/09), ada 28,59 juta orang miskin di Indonesia pada bulan Maret 2015, setara dengan 11,22% dari total penduduk Indonesia. Pada September 2014 persentase penduduk miskin di Indonesia mencapai 10,96% dari penduduk Indonesia, atau 27,73 juta orang. Maka dalam jangka waktu 5 bulan, jumlah penduduk miskin Indonesia naik sebesar 860.000 orang. BPS menerbitkan data dari persentase kemiskinan negara ini dua kali setiap tahunnya yaitu pada bulan Maret dan bulan September.

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Badan Pusat Statistik (BPS) mengumumkan hari ini (01/09) bahwa inflasi Indonesia telah sedikit menurun menjadi 7,18% pada basis year-on-year (y/y) di Agustus 2015, dari 7,26% (y/y) di bulan sebelumnya. Pada basis month-on-month, inflasi naik 0,39% di bulan Agustus, di bawah perkiraan para analis. Sementara itu, sektor manufaktur Indonesia terus berkontraksi di bulan Agustus, meskipun kondisinya membaik dibandingkan bulan sebelumnya.

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During Bank Indonesia’s Board of Governors it was decided on 18th August 2015 to hold the BI Rate at 7.50 percent, while maintaining the Deposit Facility rate at 5.50 percent and the Lending Facility rate at 8.00 percent. The decision is consonant with efforts to control inflation within the target corridor of 4±1 percent in 2015 and 2016. In the short term, Bank Indonesia (BI) is focused on efforts to stabilize the rupiah amid uncertainty in the global economy, by optimizing monetary operations in the rupiah and the foreign exchange market.

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Bank sentral Indonesia (Bank Indonesia) memprediksi kenaikan inflasi di bulan Juni dan Juli karena perayaan Ramadan dan Idul Fitri, kemungkinan dampak fenomena cuaca El Nino, dan tahun ajaran baru. Bank Indonesia memprediksi akan ada inflasi 0,66% pada basis month-to-month (m/m) di bulan Juni 2015, yang terutama didorong oleh harga bahan pangan yang tidak stabil (fenomena normal menjelang Idul Fitri). Pada basis year-on-year (y/y), inflasi Indonesia diprediksi untuk meningkat menjadi 7,40%, dari 7,15% di bulan Mei.

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Most stock markets and currencies in Southeast Asia weakened on Friday (29/05), including Indonesia’s benchmark Jakarta Composite Index and the rupiah. The Jakarta Composite Index fell 0.40 percent to 5,216.38 points, while the rupiah depreciated 0.01 percent to IDR 13,224 per US dollar according to the Bloomberg Dollar Index. Over the past week, Indonesian stocks and the rupiah weakened primarily due to the Greek debt crisis, looming higher US interest rates and the lack of positive domestic factors.

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Para investor jelas sedang menunggu hasil-hasil dari Pertemuan Dewan Gubernur Bank Indonesia yang diadakan pada hari ini (19/05). Dalam pertemuan kebijakan ini, bank sentral Indonesia akan memutuskan pendekatan moneternya. Bagi banyak pelaku pasar, merupakan hal yang penting dan krusial untuk mempelajari apakah Bank Indonesia akan menyesuaikan kebijakan suku bunganya dalam rangka mendukung pertumbuhan ekonomi Indonesia (yang telah mencapai kecepatan terlambat dalam lima tahun terakhir di kuartal 1 tahun 2015).

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Statistics Indonesia (BPS) announced on Monday morning (04/05) that Indonesia’s inflation accelerated to 6.79 percent year-on-year (y/y) in April 2015. On a month-to-month basis, Indonesian inflation was recorded at 0.36 percent in April. Although this result is in line with analysts’ previous projections, April inflation realization is in sharp contrast with the ‘usual’ inflation pace in the fourth month of the year. Usually, Indonesia records slight deflation in April as prices ease amid the peak of the harvest season.

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