Below is a list with tagged columns and company profiles.
Today's Headlines GDP
The Asian Development Bank (ADB) stated in its Asian Development Outlook (ADO) report, which was released on Wednesday (11/04), that it expects the Indonesian economy to expand by 5.3 percent year-on-year (y/y) in 2018 and 2019 on the back of rising investment and an improvement in household consumption.
Entering the second quarter of 2018 chief executive officers (CEOs) have become less optimistic about the Indonesian economy and politics. This should be no surprise considering there have emerged significant concerns about a looming global trade war (with the USA and China as main actors), while further monetary tightening in the USA has been putting pressure on the Indonesian rupiah.
Despite (modestly) accelerating economic growth since 2016, concerns about Indonesia's gross domestic product (GDP) expansion persist. Indonesian Coordinating Minister for Economic Affairs Darmin Nasution said he expects Indonesia's economic growth to slow in the first quarter of 2018 (compared to Q1-2017) as the peak of the nation's big harvest is expected to occur in the second quarter this year (while last year it fell in the March/April period). Meanwhile, credit growth has remained bleak in Indonesia.
The weakening growth trend of the Chinese economy may not have ended yet. Despite the nation's gross domestic product (GDP) growth rebounding to 6.9 percent year-on-year (y/y) in 2017, its economy is expected to cool in 2018 as a government-led crackdown on debt risks and factory pollution drags on overall activity in the world's second-largest economy. This is a problem for Indonesia as well because China is Indonesia's biggest trading partner.
The International Monetary Fund (IMF) released a new report about the Indonesian economy - released on 6 February 2018 - in which the Washington-based institution paints a positive picture of the prospects for economic growth in Indonesia. Indonesia's real GDP growth is projected to rise gradually to 5.6 percent year-on-year (y/y) over the medium term, led by robust domestic demand.
The central bank of Indonesia (Bank Indonesia) stated on Thursday (28/12) that it expects to see Indonesia's economic growth at 5.05 percent year-on-year (y/y) in full-year 2017, up modestly from 5.02 percent (y/y) in the preceding year. Bank Indonesia Governor Agus Martowardojo said the Indonesian economy is recovering unevenly yet gradually.
Like in most other nations across the world, Indonesia is also experiencing rapid urbanization. Currently, 56 percent of the Indonesian population lives in urban areas (at the start of the century - in 2000 - the figure was 42 percent). Although urbanization is - in theory - an engine of economic growth, Indonesia is not reaping the full benefits of urbanization.
The World Bank released the December 2017 edition of its flagship publication "Indonesia Economic Quarterly" on Thursday (14/12). This latest edition, which is titled "Decentralization that delivers", paints a positive picture about Indonesia's economic growth and financial system stability for the year 2018 and beyond.
The International Monetary Fund (IMF) released several preliminary statements related to the latest visit of a IMF team, led by Luis E. Breuer, to Indonesia (the visit took place between 1 - 14 November 2017). Overall, the team sees the continuation of good economic growth in Indonesia, supported by prudent macroeconomic policies, improved global GDP growth and rising commodity prices, as well as sustained efforts to strengthen the nation's competitiveness.
Although, overall, Indonesia's gross domestic product (GDP) growth in the third quarter of 2017 was slightly disappointing at a pace of 5.06 percent year-on-year (y/y), investment, export and government consumption all strengthened. Hence, the main reason why Indonesia's Q3-2017 GDP growth was below expectations is sliding growth of household consumption.
Latest Columns GDP
The Asian Development Bank (ADB) expects Indonesia's economic growth to rebound in 2016 on the back of improving government spending realization (specifically on infrastructure development) and the series of economic policy packages that have been unveiled by the government since September 2015. Consumers and private investors are expected to respond positively to these government efforts hence contributing to macroeconomic growth.
In line with expectation, the central bank of Indonesia (Bank Indonesia) cut its benchmark interest rate (BI rate) by 25 basis points to 6.75 percent on Thursday (17/03) at its two-day policy meeting. It is the third straight month of monetary easing in Southeast Asia's largest economy. In the preceding two months the lender of last resort had also cut borrowing costs by 0.25 percent, each month. Furthermore, the deposit and lending facility rates were also cut by 25 basis points to 4.75 percent and 7.25 percent, respectively (effective per 18 March 2016).
The International Monetary Fund (IMF) expects Indonesia's economy to expand 4.9 percent year-on-year (y/y) in 2016, slightly up from a 4.8 percentage point (y/y) growth of gross domestic product (GDP) in 2015. On Tuesday (15/03) Luis Breuer, IMF Mission Chief for Indonesia, said the Washington-based lender projects limited growth (+0.1 percent) of Indonesia's private consumption this year. Regarding growth of investment and government spending in 2016, the IMF holds a more positive view. On the same day, the World Bank cut its forecast for Indonesia's 2016 GDP growth by 0.2 percent to 5.1 percent.
When we look at all of the activity in financial markets this year, some interesting trends have started to emerge for those looking to invest in Asia. Stock markets in Indonesia have shown strong rallies, and have started to reverse many of the multi-year declines that have been characterizing the region. This inspired a great deal of attention for Indonesia’s stock benchmarks, as it is looking increasingly likely that improvements in the underlying economic data will continue bringing in buyers for these markets.
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.
Tomorrow (05/02), Statistics Indonesia is scheduled to release Indonesia's official full-year 2015 economic growth figure. Nearly all analysts expect to see a figure that reflects the continuation of slowing economic growth. Southeast Asia's largest economy expanded 5.0 percent in 2014 and this is expected to have eased further to 4.7 percent or 4.8 percent in 2015 on the back of (interrelated) sluggish global growth, low commodity prices, and weak export performance. Domestically, Indonesia has or had to cope with high interest rates and inflation (hence curtailing people's purchasing power and consumption as well as business expansion).
While Indonesia is currently in the middle of expanding its 4G network, the nation remains placed among the countries that have the poorest Internet penetration rate in the world. A recent World Bank report, titled 'World Development Report 2016: Digital Dividends', zooms in on the economic and social impact that occurs when a relative large part of the population cannot be connected to the Internet or when the government fails to keep pace with the growth of technology.
Consumer goods producer Unilever Indonesia, one of Indonesia's leading consumer goods firms, is expected to show better corporate earnings in 2016 compared to the preceding years on improving purchasing power of Indonesia's population. The company's net profit is estimated to grow by 15 percent compound annual growth rate (CAGR) in the coming two years, while its EBIT margin is expected to remain above 23 percent as higher costs of raw materials are compensated by higher selling prices.
Both car sales and motorcycle sales declined in 2015 in Indonesia. Primary reason for this decline was people's weaker purchasing power amid the slowing economy and persistently low commodity prices. Indonesia's GDP growth is estimated to have fallen to 4.7 percent year-on-year (y/y), the slowest growth pace since 2009. Meanwhile, amid the sluggish global economy (especially China's slowdown) and falling oil prices, Indonesia gains relatively little from its commodity exports.
The performance of Astra International, one of Indonesia's leading diversified conglomerates (but particularly known for being the dominant force in the country's automotive industry), is expected to improve next year on the arrival of new car models, estimated accelerated economic growth and its rivals' stagnating production capacity expansion. As such, Astra International should be able to increase its market share and feel less need to offer its cars to customers at discounted rates.
No business profiles with this tag
