Below is a list with tagged columns and company profiles.
Latest Reports Household Consumption
On 05 August 2021 Indonesia’s Statistical Agency (Badan Pusat Statistik, henceforth BPS) released the official gross domestic product (GDP) data for the second quarter of 2021.
Lockdowns and restrictions imposed by governments around the globe in an effort to curb the further spread of COVID-19 in society as well as people’s fear to contract COVID-19 resulted in an unprecedented decline in consumption, production, trade, tourism and investment, particularly in the second quarter of 2020.
It was already known that –just like in 2020– the Indonesian government would ban the traditional mudik this year (mudik, which is a distinctive feature of Indonesian culture, refers to the exodus of millions of city-dwellers toward their places of origin where they typically spend a few days to celebrate the end of the Ramadan month).
On 5 May 2021, Indonesia’s Statistical Agency (Badan Pusat Statistik, BPS), released the latest gross domestic product (GDP) data of Indonesia, covering the first quarter of 2021. As expected, the economic recession persisted into Q1-2021 for Southeast Asia’s largest economy.
It was already known that –just like in 2020– the Indonesian government would ban the traditional mudik this year (mudik, which is a distinctive feature of Indonesian culture, refers to the exodus of millions of city-dwellers toward their places of origin where they spend a few days to celebrate the end of the Ramadan month).
Weak demand across Indonesia, a consequence of the COVID-19 crisis, persisted into the second month of 2021 with Indonesia’s consumer price index (CPI) showing a modest inflation rate of 0.10 percent month-on-month (m/m) in February 2021.
On 5 February 2021, Indonesia’s Statistical Agency (Badan Pusat Statistik, or BPS) announced that gross domestic product (GDP) of Southeast Asia’s largest economy contracted 2.19 percent year-on-year (y/y) in the fourth quarter of 2020. This was less severe compared to Indonesia Investments’ outlook of -2.50 percent (y/y).
On Thursday 5 November 2020 Indonesia’s Statistical Agency (Badan Pusat Statistik, BPS) announced that Indonesia’s gross domestic product (GDP) contracted 3.49 percent year-on-year (y/y) in the third quarter of 2020. This pace of economic contraction in Q3-2020 was slightly more severe than we had predicted. Indonesia Investments had its outlook for Indonesia’s Q3-2020 economic growth at the range of -3.0 to -2.5 percent (y/y).
The risky decision of Indonesia’s central government and regional governments to (gradually) ease the various self-imposed social and business restrictions (that had been imposed in April 2020) has caused changes in economic activity in Indonesia, particularly in consumer behavior, starting from June 2020.
For the first time in several years, Indonesia Investments decided that it had to adjust its outlook for Indonesia’s economic growth. Since 2016, Indonesia’s modestly accelerating economic growth rate had been fully in line with our estimates.
Latest Columns Household Consumption
The central bank of Indonesia (Bank Indonesia) revised down its projection for Indonesia's economic growth in 2016 to the range of 5.0 - 5.4 percent (y/y), slightly below its previous forecast in the range of 5.2 - 5.6 percent (y/y). Bank Indonesia Governor Agus Martowardojo said the central bank decided to trim its projection for gross domestic product (GDP) growth this year due to sluggish global economic growth, low commodity prices, and Indonesia's slightly disappointing Q1-2016 GDP growth figure at 4.92 percent (y/y).
Cosmetics and household goods producer Kino Indonesia, which conducted an initial public offering (IPO) on the Indonesia Stock Exchange in late-2015, is expected to post good net profit growth in 2016. Last year the company's net profit surged a whopping 153 percent (y/y) to IDR 263 billion (approx. USD $20 million) due to higher selling prices and lower production costs. In 2016 Kino Indonesia's net profit is expected to grow 44 percent (y/y) to IDR 378 billion. Therefore Indopremier Securities advises investors to buy Kino Indonesia's shares.
The decision of Indonesia's central bank (Bank Indonesia), last week, to cut its key interest rate (BI rate) by 0.25 percent to 7.00 percent and to cut the reserve-requirement ratio for commercial banks' rupiah deposits by 1 percent to 6.5 percent is a decision that should boost household consumption in Indonesia in 2016, improve people's purchasing power, give rise to a stronger automotive and property sector, and boost liquidity at local banks (hence providing room for an acceleration of credit growth in Southeast Asia's largest economy).
The Indonesian economy expanded 5.04 percent year-on-year (y/y) in the fourth quarter of 2015, slightly beating analyst expectations and constituting the highest quarterly growth pace since Q1-2014 thus providing optimism that Indonesia's economic growth will finally be able to accelerate in 2016 after six years of economic slowdown (therefore Indonesia's benchmark Jakarta Composite Index surged a staggering 2.85 percent on Friday). In full-year 2015 the economy of Indonesia expanded 4.79 percent (y/y), the slowest growth pace since 2009.
The Indonesian economy, from the expenditure side, is highly dominated by domestic demand. From Q1-2010 to Q1-2015, the average role of domestic demand reached 99.5 percent, with the lowest level at 96.8 percent. The positive side of this situation is that the Indonesian economy is relatively resilient to external factors. History shows that despite the US subprime mortgage crisis and financial crisis in Europe, economic growth in Indonesia remained relatively high and consistent compared to other countries.
In his presentation at the Indonesia Investment Summit 2015, organized in Jakarta on 15-16 January, Standard Chartered Bank Senior Economist Fauzi Ichsan said that despite the challenges amid global uncertain times, there remains plenty room and opportunity for Indonesia to grow robustly on the long-term. In fact, by 2030 Ichsan believes that Indonesia will be among the world's top ten countries in terms of largest economies. For investors it is important to understand the challenges and key pillars of economic growth.
According to data from ANZ-Roy Morgan, Indonesian consumer confidence increased 3.7 points to hit a record high at 161.4 points in August. Compared to the same month last year, Indonesian consumer confidence has grown by 11.9 points. Improved confidence in August is primarily due to increased confidence in personal finances and consumers’ expectation to buy household appliances. Indonesians are also more optimistic about the condition of the domestic economy in the five years ahead due to the arrival of president-elect Joko Widodo.
Indonesia’s gross domestic product (GDP) growth in the first half of 2014 reached 5.17 percent (year-on-year), thus continuing the slowing growth trend that has been recorded by the country since 2011. Forecasts for GDP growth in the second half of 2014 indicate a slight improvement (to the range of 5.2 to 5.3 percent year-on-year) supported by strong household consumption, increased government spending and further growth of the trade and services sector. However, in recent quarters the official GDP figure has been lower than most forecasts.
Statistics Indonesia (BPS) announced on Tuesday (05/08) that Indonesia’s economy grew 5.12 percent in the second quarter of 2014 from the same quarter last year. This means that gross domestic product (GDP) growth of Indonesia has continued the slowing trend it has been experiencing since 2011. The 5.12 percentage point GDP growth in Q2-2014 is the slowest growth pace that has been recorded by Southeast Asia’s largest economy since the fourth quarter of 2009. What explains this slowing economic growth of Indonesia?
On Thursday 12 June 2014 it was decided at the central bank’s Board of Governors’ Meeting to maintain the country’s benchmark interest rate (BI rate) at 7.50 percent, with the Lending Facility rate and Deposit Facility rate held at 7.50 percent and 5.75 percent, respectively. This decision is consistent with ongoing efforts to steer inflation back towards its target corridor of 4.5±1 percent in 2014 and 4.0±1 percent in 2015, as well as to reduce Indonesia’s current account deficit to a more sustainable level.
