11 July 2025 (closed)
Jakarta Composite Index (7,047.44) +42.07 +0.60%
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Latest Reports Inflation
On Sunday 5 May 2024 Indonesia Investments released the April 2024 edition of its monthly report. As usual, the report zooms in on topics - relevant in the month of April 2024 - that affect the investment environment of Indonesia.
Over the past couple of months we have often expressed our concern over inflation in Indonesia, particularly low core inflation as it could signal that purchasing power is quite weak. In February 2024 we finally saw some inflationary pressures again in Indonesia with a 0.37 percent month-on-month (m/m) inflation rate.
On Tuesday 5 March 2024 Indonesia Investments released the February 2024 edition of its monthly report. The report focuses on the most important economic, political and social developments in Indonesia in the month of February 2024.
On Sunday (04.02.2024) Indonesia Investments released the January 2024 edition of its monthly report. The report offers analyses of various economic, political and social topics that are relevant in the present.
On Friday 5 January 2024 Indonesia Investments released the December 2023 edition of its monthly report. The report informs readers on the latest -and in our opinion most relevant- economic, political and social developments in Indonesia.
Interestingly enough, November was the month that – so far – brought the biggest inflationary pressures to Indonesia in 2023. The latest data published by Indonesia’s Statistical Office (Badan Pusat Statistik, BPS) showed that headline inflation reached 0.38 percent month-on-month (m/m) in November 2023, higher than expected.
On Tuesday 5 December 2023 Indonesia Investments released the November 2023 edition of its monthly report. The report informs readers on the latest - and in our opinion most relevant - economic, political and social developments in Indonesia.
Inflationary pressures in October 2023 were in line with our expectations. Based on the latest data from Indonesia’s Statistical Office (Badan Pusat Statistik, BPS), Indonesia’s headline inflation was recorded at a rate of 0.17 percent month-on-month (m/m) in October 2023. On an annual basis, inflation accelerated to 2.56 percent year-on-year (y/y), up from 2.28 percent (y/y) in September 2023.
On Sunday 5 November 2023 Indonesia Investments released the October 2023 edition of its monthly report. The report informs readers on the latest - and in our opinion most relevant - economic, political and social developments in Indonesia.
As expected, inflationary pressures increased on a month-on-month (m/m) basis in September 2023. However, on a year-on-year (y/y) basis, Indonesian inflation eased quite significantly as the impact of the subsidized fuel price hike in September 2022 is now removed from the data. Based on the data from Indonesia’s Statistical Office (BPS), Indonesia’s headline inflation decelerated to a rate of 2.28 percent (y/y).
Latest Columns Inflation
On Thursday 14 November 2013, Agus Martowardojo, Governor of Indonesia's central bank (Bank Indonesia), delivered his end-of-the-year speech at the Annual Bankers’ Dinner. The meeting was attended by leaders from Indonesia's House of Representatives (DPR), economic ministers, leaders of the country's banking industry and business community, non-ministerial government agencies as well as a number of international institutions, thus representing a strategic forum in terms of the national economy.
Indonesia's benchmark stock index (IHSG) was not able to continue its rebound. On Friday (15/11), the IHSG fell 0.73 percent to 4,335.45 points amid widespread profit taking. Foreign investors recorded net selling of IDR 193 billion (USD $16.9 million) on today's trading day. Moreover, investors are concerned about the impact of the higher interest rate of the central bank (7.50 percent), particularly on the property and banking sectors in the fourth quarter of 2013.
Despite rising concerns about the slowing pace of the Indonesian economy, the deputy minister of Finance Bambang Brodjonegoro reminded investors that Indonesia's economic growth in the third quarter of 2013 still constitutes one of the highest growth rates around the globe. Economic expansion in Q3-2013 slid to 5.6% in Southeast Asia's largest economy. With the exception of China (7.8% GDP growth in Q3-2013), Indonesia's growth continues to outpace growth in other emerging markets, such as Brazil (3.3%) and Turkey (4%).
Five more new public listings are expected on the Indonesia Stock Exchange (IDX) in the remainder of 2013 despite the current less rosy macroeconomic environment in Indonesia. The companies that are expected to conduct their initial public offering (IPO) are Indomobil Multi Jasa, Dwi Aneka Jaya Kemasindo, Blue Bird, Soechi Lines, and Sawit Sumbermas Sarana. So far this year, 26 Indonesian companies went public on the IDX. At the start of the year, the IDX targeted for at least 30 new listings in 2013.
Indonesia's Jakarta Composite Index (IHSG) started Tuesday's trading day (12/11) slightly in the red. However, after the central bank of Indonesia (Bank Indonesia) announced to have raised its benchmark interest rate (BI rate) by 25 bps to 7.50 percent, the IHSG quickly plunged. The interest rate hike is considered as a sign that Bank Indonesia is still concerned about the nation's macroeconomy, particularly Indonesia high inflation (8.32 percent yoy in October 2013). The index fell 1.38 percent to 4,380.64 points.
Bank Indonesia decided to raise the BI rate by 25 bps to the level of 7.50 percent, with the Lending Facility rate and Deposit Facility rate raised to 7.50 percent and 5.75 percent respectively. This policy was taken in light of the persistently large current account deficit amid widespread global uncertainty. Therefore, the decision was taken in order to ensure that the current account deficit is reduced to a more sound level and inflation in 2014 returns to around 4.5±1 percent, thereby supporting sustainable economic growth.
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 October 2013 edition, a number of important issues that are monitored include Indonesia's inflation rate, the trade balance, the current account deficit, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt:
Indonesian car sales have already exceeded the one million mark in October 2013. In the January-October period, 1,018,786 car units were sold, a ten percent increase compared to car sales in the same period last year. Growing demand for cars in Indonesia indicates that this sector of Southeast Asia's largest economy is not influenced by current negative market sentiments, such as the sharply depreciated Indonesian rupiah exchange rate (against the US dollar), high inflation (8.32 percent yoy in October 2013), and slowing economic growth.
Indonesia will most likely not meet its original GDP growth target of 6.3 percent (stipulated in the 2013 State Budget). Yesterday (06/11), it was announced by Statistics Indonesia that Indonesia’s GDP growth figure in the third quarter of 2013 was recorded at 5.62 percent (year-on-year, yoy), the weakest quarterly growth figure since 2009 when the global financial crisis impacted on Southeast Asia’s largest economy. In 2013, Indonesia feels the global impact again, in combination with domestic factors.
Last week, the Jakarta Composite Index (IHSG) weakened. The benchmark stock index of Indonesia was affected by negative market sentiments brought on by domestic factors. Most importantly, the large-scale demonstrations across Indonesia by Indonesian workers who demanded for higher minimum wages as annual inflation has surged since June 2013 after prices of subsidized fuels were raised. These demands, however, jeopardize the attractiveness of Indonesia's investment climate.
