Below is a list with tagged columns and company profiles.

Today's Headlines Inflation

  • Indonesia Investments' Newsletter of 28 December 2014 Released

    On 28 December 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic matters such as rupiah exchange rate performance, a geothermal energy update, forecasts for Indonesia’s November trade balance and December inflation, as well as the breaking news story about the missing AirAsia airplane.

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  • Forecasts for Indonesia’s November Trade Balance & December Inflation

    The trade balance of Indonesia is expected to show another deficit in November 2014 as oil and gas imports in combination with weak commodity exports continue to plague the balance. However, Executive Director at the Economic and Monetary Policy Department of Indonesia’s central bank (Bank Indonesia) Juda Agung said that the deficit will most likely turn into a surplus soon. Still, another monthly trade deficit implies that the country’s wide current account deficit has few chances to improve markedly at the year-end.

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  • Indonesia's 2014 Annual Car Sales Fall on Bleak Economy & Fuel Hike

    Domestic car sales in Indonesia declined 15 percent to 91,449 vehicles in November 2014 (from the same month last year). Declining car sales in Southeast Asia’s largest economy are believed to be caused by the recent subsidized fuel price hike. In mid-November the Joko Widodo-led government raised prices of subsidized fuels (low-octane gasoline and diesel) over 30 percent in order to reduce state spending on fuel consumption and reallocate funds to structural economic and social development.

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  • Bank Indonesia’s BI Rate Unchanged after December Board Meeting

    Indonesia’s central bank decided to keep its benchmark interest rate (BI rate) at 7.75 percent at Thursday’s Board of Governors’ Meeting (11/12). The Lending Facility and Deposit Facility were kept at 8.00 percent and 5.75 percent, respectively. The central bank is convinced that the current interest rate levels are effective to combat short-term inflationary pressures (triggered by the implementation of higher subsidized fuel prices in mid-November) pushing it back to the target corridor of between 3 and 4 percent (y/y) in 2015.

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  • Financial Update Indonesia: Credit Growth, Bad Loans and Retail Sales

    The central bank of Indonesia projects non-performing loans (NPL) to rise to 2.4 percent of the country’s total outstanding loans by the end of the year, significantly up from 1.8 percent at the end of last year. Despite the acceleration of bad loans in Indonesia, the institution stated that it is still manageable. Meanwhile, loan growth in Indonesia is estimated to slow to 11 or 12 percent (y/y) by the end of 2014 (the slowest pace since 2010), down from 21.4 percent (y/y) in 2013 primarily due to the central bank’s monetary tightening policy.

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  • World Bank Report: GDP Growth Indonesia Revised to 5.2% in 2015

    On Monday (08/12) the World Bank released the December edition of its Indonesia Economic Quarterly, entitled ‘Delivering Chance’. In the report the World Bank cut its forecast for economic growth in Indonesia next year to 5.2 percent (y/y), from 5.6 percent (y/y) in the July edition of its flagship publication, due to weaker investment growth and sluggish exports. Indonesia’s GDP growth in 2014 is projected at 5.1 percent (y/y), slightly below the World Bank’s previous estimate of 5.2 percent.

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  • Consumer Confidence in Indonesia Falls Slightly on Fuel Prices & Inflation

    The latest survey of Indonesia’s central bank showed that consumer confidence fell slightly in November 2014 amid concern that the recent subsidized fuel price hike will lead to decreased business activity as well as reduced job availability in the next six months in Southeast Asia’s largest economy. Bank Indonesia’s consumer confidence index fell to 120.1 points from 120.6 points in October. The institution interviewed 4,600 households in 18 major Indonesian cities for this survey.

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  • Inflation Update Indonesia: November Inflation Rises to 6.23% Y/Y

    Indonesia’s Central Statistics Agency (BPS) announced on Monday (01/12) that the country’s inflation figure accelerated to 6.23 percent year-on-year (y/y) in November 2014 (from 6.23 percent y/y in the previous month) due to the impact of higher subsidized fuel prices implemented by the Indonesian government. On 18 November, prices for subsidized fuels (low-octane gasoline and diesel) were raised by more than 30 percent in a bid to reallocate public spending from fuel consumption to productive long-term development.

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  • Indonesia Investments' Newsletter of 30 November 2014 Released

    On 30 November 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic matters such as the country’s revised inflation outlook, participation in the Asian Infrastructure Investment Bank, updates on palm oil and coal, car sales, Jokowi’s development targets, and more.

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  • Low Cost Green Cars Support Car Sales in Indonesia

    Domestic sales of low-cost green cars (LCGCs) in Indonesia may exceed the level of 200,000 units in 2015, a 14 percentage point growth from an estimated 175,000 sold LCGC units this year. Amid slowing domestic car sales (a consequence of the country’s slowing economic growth and tighter monetary policy), popularity of the recently introduced LCGC has managed to support total car sales in Southeast Asia’s largest economy. In the first ten months of 2014, a total of 1.04 million cars were sold, up 1.72 percent from the same period last year.

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Latest Columns Inflation

  • Slowing Growth in Indonesian Cement Sales Continues in Semester II

    Cement sales in Indonesia grew by seven percent to 32.9 million tons in the period January to July 2013. This pace of growth is significantly lower compared to the double-digit cement growth rate last year and thus forms another sign of cooling economic growth in Southeast Asia's largest economy (cement sales are a good indicator to measure the state of economic growth of a country). A slowdown in domestic cement sales is likely to continue in the second half of 2013, partly due to a decline in infrastructure projects.

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  • Despite Higher Idul Fitri Consumption, Indonesia May Not Reach GDP Target

    Although the holy fasting month of Ramadan and subsequent Idul Fitri celebrations always provide a boost for national economic growth in Indonesia as domestic consumption tends to peak, analysts believe that it will not contribute significantly to the government's 6.3 percent GDP growth target this year. During Ramadan and Idul Fitri (known as Lebaran), Indonesian consumers generally spend more on food products, clothes, shoes, tickets for transport and hotels than in other months, and thus lead to increased economic activity.

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  • Possible End to Quantitative Easing Will Impact on Emerging Economies

    Worldwide, most stock indices fell on Wednesday (07/08), particularly Japan's Nikkei index, after it has been speculated that the Federal Reserve may phase out the third round of its quantitative easing program in September 2013. This program, involving a monthly USD $85 billion bond-buying package, aims to spur US economic growth while keeping interest rates low. However, one important side effect has been rising stock markets around the globe. Now the end of QE3 is in sight, investors shy away from riskier assets.

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  • Indonesia's Inflation Rate Accelerates to 3.29% in July 2013

    Indonesia’s inflation rate in July 2013 was significantly higher than analysts had previously estimated. The country’s July inflation figure accelerated to 3.29 percent. On year-on-year basis, it now stands at 8.61 percent, the highest inflation rate since many years. Particularly food commodity and transportation prices rose steeply. The main reason for Indonesia's high inflation is the reduction in fuel subsidies. In late June, the government increased the prices of subsidized fuels in order to relieve the ballooning budget deficit.

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  • Despite High July Inflation and Trade Deficit, Indonesia's IHSG Slightly up

    As I stated before, mixed sentiments continue to influence the performance of Indonesia's main stock index (IHSG). During Thursday's trading day (01/08), the index moved sideways. News that the Federal Reserve intends to continue its bond-buying program made a good impact. However, this positive sentiment was offset by the release of Indonesia's high July inflation rate as well as the country's continued trade deficit. At the end of the day, the IHSG managed to post a gain as it received support from rising stock indices in Asia.

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  • Facing Higher Inflation: Indonesia's Stock Market under Pressure

    Last week (22-26 July 2013), Indonesia's main stock index (IHSG) ended 1.39 percent down at 4,658.87. The daily value of transactions on the regular market narrowed to an average of IDR 3 trillion (USD $300 million) from IDR 3.84 trillion in the previous week. Foreigners still recorded net sales amounting to IDR 92.9 billion (USD $9.3 million). Lack of positive sentiments, financial results of companies that were below expectation and the continued weakening of the rupiah against the US dollar resulted in the decline of the index.

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  • Investment Realization in Indonesia USD $19.8 billion in Semester I-2013

    Investment realization in Indonesia grew 30.2 percent to IDR 192.8 trillion (USD $19.8 billion) in the first six months of 2013 (compared to the same period last year). This result implies that 49.4 percent of the investment target for full 2013 has been achieved. The Indonesia Investment Coordinating Board (BKPM) aims to collect IDR 390.3 trillion in investments this year. This target is divided in domestic direct investment (DDI) of IDR 117.7 trillion and foreign direct investment (FDI) of IDR 272.6 trillion.

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  • Market Waits for Indonesia's Inflation Data and Financial Company Reports

    Indonesia's main stock index (IHSG) increased 3.98 points to close at 4,724.41 on the last trading day (19/07). During last week, the index rose a limited 1.97 percent amid the context of a weakening IDR rupiah (Indonesia's currency even fell below the psychological boundary of IDR 10,000 against the US dollar). The IHSG's performance last week was mainly supported by rising shares in the country's finance, property, construction and metal mining sectors, while the cement and plantation sectors were corrected.

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  • Weakening Rupiah due to Indonesia's Fundamentals and Profit Taking

    The Indonesian rupiah (IDR) is experiencing one of its worst losing streaks in a decade. On Friday (19/07), the currency weakened to IDR 10,070 against the US dollar, which implies a devaluation of 4.14% in 2013 so far. The central bank of Indonesia, Bank Indonesia, does all it can to support the currency: the country's lender of last resort supplies dollars to the market triggering the reduction of foreign reserves from USD $105 million at end-May to $98 million at end-June, and raised its benchmark interest rate (BI Rate) by 50 bps to 6.50%.

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  • Asian Stock Indices Mixed but Indonesia's IHSG Continues to Rise

    IHSG - Indonesia Stock Exchange - 18 July 2013 - Indonesian Index - Indonesia Investments

    Indonesia's main stock index (IHSG) went up 0.89 percent to 4,720.44 on Thursday (18/07). The index was supported by developments in the United States. On Wednesday (17/07), Ben Bernanke spoke to the US Congress and said that the Federal Reserve is likely to continue its bond-buying program in 2013 and may gradually withdraw the quantitative easing program in 2014. But only if economic recovery of the US provides the good context. This message supported the IHSG although foreign investors continued to record a net sale.

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