Today (02/12), Statistics Indonesia (BPS) announced that Indonesian inflation was recorded at 0.12 percent in November 2013. Suryamin, Head of BPS, said that the price movements of basic needs, including rice and chili, were under control in November, while other components, such as groceries and clothing, in fact recorded deflation. Compared to the month November in previous years, the 0.12 inflation rate is limited. In November 2012, inflation was recorded at 0.34 percent. Indonesia's year-on-year inflation rate now stands at 8.37 percent.

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Agus Martowardojo, Governor of Indonesia's central bank, expects the Indonesian economy to consolidate in 2014. The country is currently experiencing an economic correction with GDP growth slowing to 5.62 percent in the third quarter of 2013. Martowardojo said that the current account deficit still needs time to reach a healthy level. Indonesia's current account deficit stood at USD $8.4 billion (equivalent to 3.8 percent of the country's GDP) in the third quarter of 2013, down from USD $9.8 billion (4.4 percent of GDP) in the second quarter.

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Agus Martowardojo, Governor of Indonesia's central bank (Bank Indonesia), stated that the country's economy is expected to grow 5.7 percent in 2013. Bank Indonesia believes GDP growth in the fourth quarter of 2013 to fall below the growth figure realized in Q3-2013 (5.62 percent). Martowardojo said that the government needs to continue measures to improve the country's exports, while trying to curtail imports of oil and gas as domestic demand for fuels remained high, even after the increase in prices of subsidized fuels in June 2013.

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Today (06/11), Statistics Indonesia announced that Indonesia's gross domestic product (GDP) expanded 5.62 percent in the third quarter of 2013 from the same period in 2012. The result implies the continuation of Indonesia's slowing economic growth as Q3-2013 constitutes the fifth consecutive quarter in which the country recorded slowing economic growth. Previously, the government had already expressed its concern about the GDP growth figure in Q3-2013 because the current high inflation rate curbs household consumption.

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Indonesia's trade surplus in August 2013 was not continued into September. Today (01/11), Statistics Indonesia announced that the country experienced a trade deficit of USD $657.2 million in September 2013. Exports in September fell 6.85 percent year-on-year (yoy) to USD $14.81 billion, while imports rose 0.77 percent (yoy) to USD $15.47 billion. During January-September 2013, total exports amounted to USD $134.05 billion, while total imports amounted to USD $140.31 billion. This means that the current trade deficit stands at USD $6.26 billion.

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A senior official at Indonesia's central bank (Bank Indonesia) stated that the country's current account deficit is expected to ease to 2.5 - 2.7 percent of Indonesia's gross domestic product (GDP) by 2014. In the second quarter of 2013, the account deficit reached USD $9.8 billion or 4.4 percent of GDP in Q2-2013, an alarmingly high figure that has caused much concern among the investor community. This deficit is particularly brought on by a large deficit in the country's oil & gas sector in combination with strong domestic demand for imports.

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The government of Indonesia will be firm to convince the international community at the Asia- Pacific Economic Cooperation (APEC) forum to place crude palm oil (CPO) - including its derivative products - and rubber on the APEC Environmental Goods List (EG List). In the APEC ministerial meeting in Surabaya (East Java), last April, Indonesia failed to include these products on the list. However, the government will continue its lobby during the current APEC meeting by stressing that these products are environmentally friendly.

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Indonesia’s economy continues to adjust, as weaker commodity prices, tighter international financing, and slowing domestic demand moderate the growth rate to 5.6 percent for 2013. This downward revision is discussed in the latest edition of the World Bank’s Indonesia Economic Quarterly (IEQ). Further moderation of growth (at 5.3 percent) may be expected in 2014, with growth in high income economies firming but international market conditions likely remaining volatile.

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Indonesia's trade deficit is expected to amount to USD $4 billion by the end of 2013, implying a moderation from the USD $5.54 billion deficit that emerged between January and August 2013. Indonesia's exports are forecast to decline by about 5 percent in the remainder of 2013 due to the weak global environment, particularly with the current ongoing political uncertainties in the USA. As such, in order to combat the deficit, the government intends to limit imports. Next year, Indonesia will most likely continue to post a trade deficit.

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Today, Statistics Indonesia (BPS) released Indonesia's export and import figures for the month August 2013. Exports in August amounted to USD $13.16 billion, implying a 12.77 percent decline compared to exports in July 2013, or a 6.31 decline year-on-year. Imports in August 2013 amounted to USD $13.03 billion, a 25.20 percent fall compared to the previous month, or a 5.69 percent fall year-on-year. As such, Indonesia recorded a trade surplus of USD $130 million in August.

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Inflation in June 2014 increased by 0.43 percent (month-to-month, mtm) in accordance with the traditional pattern ahead of the holy fasting month of Ramadan and Idul Fitri celebrations. These occasions always trigger inflationary pressures as consumers increase spending. However, June inflation remains under control and is even lower than the historical average in June in recent years (0.56 percent mtm). On a year-on-year (yoy) basis, inflation stood at 6.70 percent, thus continuing the downward trend since the beginning of 2014.

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ICRA Indonesia, an independent credit rating agency and subsidiary of ICRA Ltd. (associate of Moody's Investors Service), publishes a monthly newsletter which provides an update on the financial and economic developments in Indonesia of the last month. In the May 2014 edition, a number of important topics that are monitored include Indonesia's inflation rate, the trade balance, the BI rate, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt of the newsletter:

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ICRA Indonesia, an independent credit rating agency and subsidiary of ICRA Ltd. (associate of Moody's Investors Service), publishes a monthly newsletter which provides an update on the financial and economic developments in Indonesia of the last month. In the April 2014 edition, a number of important topics that are monitored include Indonesia's inflation rate, the trade balance, the BI rate, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt of the newsletter:

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Statistics Indonesia (BPS) announced on Monday (05/05) that the economy of Indonesia - Southeast Asia's largest economy - grew at a much slower pace in the first quarter of 2014 than had been expected by analysts. Gross domestic product growth slowed to 5.21 percent (year-on-year) in Q1-2014, significantly down from the 6.03 percentage growth (yoy) that was recorded in Q1-2013. Gross domestic fixed capital formation (GFCF) slowed to 5.13 percent from 5.9 percent in the same period last year.

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ICRA Indonesia released an analysis of the economic impact of the ban on export of raw minerals. The ban - stipulated by the new 2009 Mining Law - became effective per 12 January 2014 (although in a milder form as some mineral ore exports are allowed under specific terms) and aims at boosting domestic processing. However, it led to great concern among domestic and foreign stakeholders as its implications on the economy of Indonesia - a global leader in exports of mineral resources - were unknown.

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ICRA Indonesia, an independent credit rating agency and subsidiary of ICRA Ltd. (associate of Moody's Investors Service), publishes a monthly newsletter which provides an update on the financial and economic developments in Indonesia of the last month. In the March 2014 edition, a number of important topics that are monitored include Indonesia's inflation rate, the trade balance, the BI rate, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt of the newsletter:

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The central bank of Indonesia (Bank Indonesia) expects Indonesia's economic growth to slow to 5.77 percent (year-on-year) in the first quarter of 2014. However, despite this further slowing trend, the institution is content with recent macroeconomic developments: external demand is growing, while domestic demand is moderating, thus impacting positively on the country's current account deficit as well as inflation. Household consumption is expected to have grown in Q1-2014 due to the holding of legislative elections on 9 April 2014.

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Indonesia's gross domestic product (GDP) growth is expected to move sideways in the first quarter of 2014. Finance Minister Chatib Basri forecasts a growth rate of between 5.7 and 5.8 percent, similar to the growth pace that was recorded in the fourth quarter of 2013 (5.78 percent). Based on data from Statistics Indonesia (BPS), economic growth in Indonesia has slowed since the second quarter of 2013. In Q2-2013, Indonesia's GDP expanded by 5.89 percent, thereby ending a ten-quarter streak of +6 percentage growth.

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The rate of inflation in March 2014 demonstrated that the ongoing downward trend persists. In the reporting month of March 2014, inflation was recorded at 0.08 percent (month-to-month) or 7.32 percent (year-on-year), down from the rates recorded in the previous two months at 1.07 percent (mtm) or 8.22 percent (yoy) in January and 0.26 percent (mtm) or 7.75 percent (yoy) in February. The declining inflation trend is further evidenced by a lower rate recorded in March 2014 than the historical average over the past six years at 0.24 percent (mtm).

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At 15:00 local Jakarta time on Tuesday (01/04), the Indonesian rupiah exchange rate as well as the country's benchmark stock index (known as the IHSG or Jakarta Composite Index) have shown a positive performance so far. Based on the Bloomberg Dollar Index, the rupiah appreciated 0.64 percent to IDR 11,288 per US dollar, while the IHSG climbed 2.15 percent to 4,871.38. A number of internal and external factors contributed to this remarkable performance today.

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