During his state visit to the USA, Indonesian President Joko Widodo told US President Barack Obama that Indonesia intends to join the Trans-Pacific Partnership (TPP) trade deal. Currently, 12 countries have joined the TPP, including the USA and Japan, thus creating the world's largest free trade area (an area that covers about 40 percent of world trade). By many analysts the TPP is regarded a counterbalance to the big economic influence of China.

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Paket kebijakan ekonomi kedua Indonesia di bulan September, diumumkan pada hari Selasa (29/09), menerima sambutan yang lebih hangat dari para pelaku pasar dibandingkan dengan yang pertama (diterbitkan pada 9 September), dibuktikan dengan rebound saham dan penguatan nilai tukar rupiah kemarin. Paket kebijakan terbaru Indonesia mencakup pemotongan pajak bunga untuk para eksportir, percepatan perizinan investasi untuk investasi di kompleks industri, dan pelonggaran pajak untuk impor barang-barang modal kompleks industri dan industri penerbangan.

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Presiden Joko Widodo, dikenal dengan panggilan Jokowi, akan mengumumkan paket kebijakan ekonomi kedua pada hari Selasa (29/09) di Istana Negara di Jakarta sesuai dengan pernyataan Menteri Koordinator Bidang Perekonomian Darmin Nasution. Menurut laporan, paket kedua akan berfokus terutama pada mendongkrak daya saing ekspor Indonesia dan daya tarik Indonesia sebagai tempat tujuan investasi.

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Ahead of the Federal Open Market Committee (FOMC) meeting, the two-day policy meeting which starts today (16/09), the US dollar continues to appreciate against most currencies, including the Indonesian rupiah, as investors remain cautious ahead of a possible US interest rate hike. By 09:36 am local Jakarta time, the rupiah had depreciated 0.29 percent to IDR 14,450 per US dollar according to the Bloomberg Dollar Index, a fresh 17-year low.

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On Wednesday afternoon, Indonesian President Joko Widodo unveiled some details of the new economic policy package, involving major deregulation measures, that had been announced last week by Chief Economics Minister Darmin Nasution. This package aims - on the medium to long term - to boost Indonesia’s sluggish economy.

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Indonesia telah membatalkan pengembangan jalur kereta berkecepatan tinggi antara Ibukota Jakarta dan Bandung (Jawa Barat) karena Presiden Joko Widodo memutuskan bahwa Indonesia tidak membutuhkan sebuah kereta yang bisa mencapai kecepatan lebih dari 300 kilometer (km) per jam untuk rute yang relatif singkat (150 km) di antara kedua kota. Selain jarak yang pendek, juga akan ada sekitar 14 stasiun yang didirikan di antara dua stasiun terminal, mengimplikasikan bahwa kereta ini perlu direm berkali-kali sebelum bisa mencapai kecepatan maksimumnya.

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The government of Indonesia is still busy preparing the policy package that was announced last week by Chief Economics Minister Darmin Nasution. Earlier it was reported that this stimulus package, expected to be finalized this month, involves deregulation and tax holidays designed to boost economic activity in Indonesia as well as to attract foreign currency inflows. The government will also look at how it can provide incentives to accelerate smelter development in Southeast Asia’s largest economy.

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Beberapa minggu lalu, telah dilaporkan bahwa Presiden Indonesia Joko Widodo meminta Menteri Tenaga Kerja & Transmigrasi Hanif Dhakiri untuk merevisi draft peraturan (dibuat di tahun 2013) yang mengharuskan para ekspatriat lulus tes penguasaan Bahasa Indonesia sebagai persyaratan mendapatkan izin kerja. Menurut Widodo, peraturan ini akan mengurangi daya tarik iklim investasi Indonesia.

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Indonesian President Joko Widodo wants to drop the regulation that states a foreign worker needs to learn Indonesian. Today (21/08), Cabinet Secretary Pramono Anung said President Widodo (often called Jokowi) requested Hanif Dhakiri, Indonesian Minister of Manpower and Transmigration, to revise this regulation (that was issued in 2013). According to Jokowi the language proficiency requirement would make Indonesia’s investment climate less competitive and could therefore hamper much-needed investment.

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On Friday (14/08) the Indonesian government unveiled its 2016 State Budget draft at a session in the House of Representatives (DPR). The draft is important as it shows government targets regarding the macroeconomy of Indonesia and it shows on what fields the government will focus in terms of public spending. The government - led by Indonesian President Joko Widodo - is optimistic that economic growth will finally rebound after four years of slowing economic growth as its 2016 GDP growth target was set at 5.5 percent (y/y).

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The Indonesia Investment Coordinating Board (BKPM) announced that growth of foreign direct investment (FDI) in Indonesia has slowed in the first nine months of 2014. In the first three quarters Indonesia saw the influx of IDR 228.3 trillion (USD $18.7 billion) worth of FDI, a 14.6 percentage point increase year-on-year (y/y). However, this growth pace is much lower than the 21.3 percent point growth of FDIs in the first nine months of 2013. In US dollar terms the decline was even greater as the rupiah has been depreciating.

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Indonesian stocks and the rupiah have rebounded on Friday due to several internal and external factors. During the first trading session on Friday (17/10), the benchmark stock index of Indonesia (Jakarta Composite Index, or IHSG) surged 0.94 percent to 4,998.14 points. Meanwhile, based on the Bloomberg Dollar Index, the Indonesian rupiah exchange rate had appreciated 0.26 percent to IDR 12,228 per US dollar by 12:30 pm local Jakarta time. Why do Indonesian stocks and the rupiah perform well on Friday?

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Domestic steel sales in Indonesia are expected to rise 6 percent y/y to 15.1 million tons in 2014. Meanwhile, the global average steel price has been USD $536 per ton this year, implying that the market value of Indonesian steel sales is to reach USD $8 billion this year. In recent years, the country’s steel sales have been rising on development of infrastructure, defense industry, and manufacturing. The sales are expected to continue rising in the years ahead due to commitment of the government to boost infrastructure development.

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Global credit rating agency Moody’s Investors Service stated that it maintains a stable outlook for Indonesia’s sovereign and corporate debt rating in the next quarters due to the country’s healthy credit fundamentals, solid macroeconomy, and reduced political tensions. Moody’s believes that Indonesia’s fundamentals are strong enough to offset the negative impact of external pressures such as looming higher US interest rates and slowing economic growth in China. Moody’s had raised Indonesia’s sovereign debt rating to investment grade in late 2011.

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Indonesian Finance Minister Chatib Basri said that the lower pace of economic growth in China, the world’s second-largest economy, is a major concern for Indonesia as it leads to declining demand for commodities (and thus places downward pressure on commodity prices). As Indonesia is a major commodity exporter - such as coal, crude palm oil, nickel ore and tin - the country feels the impact of weak global demand for commodities. About 60 percent of Indonesia’s exports are commodities, mostly raw ones.

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Today, Indonesian president-elect Joko Widodo (commonly referred to as Jokowi) and Facebook CEO Mark Zuckerberg met in Jakarta to discuss how Facebook can be utilized for the benefit of the people and how the social media network can support Indonesian micro businesses. With nearly 70 million, Indonesia contains the world’s fourth-largest Facebook community. With a total population that numbers about 250 million people, a burgeoning middle class and relatively low Internet penetration, there remains a large untapped potential.

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Indonesian stocks tumbled at the first trading day of the week as investors are still concerned about the condition of the global economy. Declining stock indices on Wall Street at the end of last week had a negative impact on Asian stock indices, including Indonesia’s benchmark stock index (known as the Jakarta Composite Index, or abbreviated IHSG). The IHSG fell 1.01 percent to 4,913.05, its lowest level since 4 July 2014, on Monday (13/10). Foreign investors recorded net selling of IDR 595 billion (USD $49.6 million).

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Bank Indonesia Governor Agus Martowardojo said that although the recent weakening trend of the Indonesian rupiah exchange rate is in line with the performance of other Asian currencies, the central bank is prepared to intervene in the market in an effort to support the currency and keep it in a comfortable range. On Monday (06/10), Bank Indonesia Executive Director Tirta Segara already stated that foreign exchange intervention was conducted in September 2014 in order to stabilize the rupiah exchange rate.

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Technically the benchmark stock index of Indonesia (Jakarta Composite Index, or IHSG) had to rebound after sharp declines during the last couple of trading days making Indonesian stocks relatively cheap. The IHSG was also supported by rising stock indices in Japan and Hong Kong that rose on strong US jobs data (although other Asian markets fell due to concerns about sooner-than-expected US interest rate hikes. Meanwhile, the rupiah continued to depreciate as the market is concerned about the political situation in Indonesia.

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Indonesian stocks plunged considerably on Thursday (02/10). The country’s benchmark stock index (Jakarta Composite Index, abbreviated IHSG) declined 2.73 percent to 5,000.81 points, the largest drop in almost six months. This poor performance was caused by both external and internal factors. Externally, various weak economic data from the USA and Europe as well as an appreciating yen impacted negatively on Asian stock indices. Internally, market participants responded negatively toward the inauguration of the new parliament.

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