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Today's Headlines Export

  • Indonesia’s Current Account Deficit Improves to 1.8% of GDP in Q1-2015

    The central bank (Bank Indonesia) announced on Friday (15/05) that Indonesia’s current account deficit narrowed to USD $3.8 billion, or, 1.8 percent of gross domestic product (GDP) in the first quarter of 2015. Although this result is slightly higher than Bank Indonesia’s estimation (1.6 percent of GDP), it was lower than the current account deficits in Q4-2014 (2.6 percent of GDP) or Q1-2014 (1.9 percent). This positive performance was mainly caused by a narrowing deficit in the country’s oil & gas trade balance.

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  • GDP Indonesia Update: Economic Growth 4.71% y/y in Q1-2015

    Indonesia’s economic growth in the first quarter of 2015 was recorded at 4.71 percent (y/y). Although it had been expected that Indonesia’s GDP growth figure would slip below the five percent mark, the slowdown was worse than initially expected. Suryamin, Head of Statistics Indonesia (BPS), stated earlier today (05/05) that the country’s economic growth slowed to a five-year low on the back of weak exports (the result of reduced economic growth in export markets) and lower crude oil prices.

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  • Government Indonesia Offers Tax Breaks to Improve Current Account

    Per May 2015 the government of Indonesia will offer tax breaks to companies that export a minimum of 30 percent of their production. Earlier this month, Indonesian President Joko Widodo signed a package that includes the tax break for exporters as well as a tax break for multinational companies that are willing to re-invest profits in Indonesia instead of sending profits and dividends to shareholders abroad. This package is designed to improve Indonesia’s trade balance (and the related current account balance).

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  • Bank Indonesia Expects to See an Improving Current Account in Q1-2015

    The central bank of Indonesia (Bank Indonesia) expects that the country’s current account deficit has eased to 1.6 percent of gross domestic product (GDP) in the first quarter of 2015. This estimate is lower than the institution’s initial forecast of 2 percent of GDP. Main reason for this more optimistic view is that Indonesia experienced a USD $2.43 billion trade surplus in the first quarter of 2015. Particularly the unexpectedly-wide USD $1.13 billion trade surplus in March will manage to ease pressures on the country’s current account.

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  • Bullish Indonesian Rupiah after March Trade Surplus

    Over the past two days the Indonesian rupiah has performed strongly against the US dollar. The primary reason for this performance is Indonesia’s March trade surplus. On Wednesday (15/04), Statistics Indonesia announced that the country’s March trade surplus totaled USD $1.13 billion. This is Indonesia’s fourth straight monthly trade surplus and the highest one since December 2013. Moreover, the USD $1.13 billion March surplus was nearly twice the size that analysts had forecast previously.

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  • Indonesia Posts $1.1 Billion Trade Surplus in March 2015

    Statistics Indonesia (BPS) announced on Wednesday (15/04) that Indonesia posted a USD $1.13 billion trade surplus in March 2015, the country’s fourth straight monthly trade surplus, and almost twice the size that analysts had forecast earlier. Despite the monthly trade surplus being good news, data also showed that both Indonesian exports and imports contracted. Exports were down 9.8 percent (y/y) to USD $13.71 billion in March, while imports fell 13.4 percent (y/y) to USD $12.58 billion.

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  • World Bank Cuts 2015 Economic Growth Forecast Indonesia

    In the World Bank’s East Asia and Pacific Economic Update, released on Monday (13/04), the Washington-based institution revised down its economic growth forecast for Indonesia to 5.2 percent (y/y) in 2015, down from 5.6 percent in its October 2014 Update. Main reasons for this downgrade is that Indonesia’s export performance remains weak amid the sluggish global economy, including weak demand from China (Indonesia’s largest trading partner). Meanwhile, Indonesia’s domestic consumption is curtailed by high interest rates.

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  • Indonesian Government Flexible on Mandatory Letter of Credit (L/C)

    Amid unclarity over the newly introduced mandatory use of letters of credit (L/C), the Indonesian government has showed some flexibility. Starting from Wednesday (01/04) Indonesian exporters of four key commodities - coal, palm (kernel) oil, oil & gas, and minerals - are required to use L/C for all export deals. This new rule was developed in order to increase Indonesia’s export earnings and enhance monitoring sales of the country’s natural resources. However, a temporary exemption is now made possible.

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  • Units of Mitsubishi & L’Oreal Open Factories in Indonesia

    This week L’Oreal Indonesia opened its new factory in Cikarang (West Java), while Mitsubishi Motors Krama Yudha Indonesia started construction of a new car manufacturing plant, in Cikarang as well. Both factories will produce products for the Indonesian market and the regional ASEAN market as well as non-ASEAN markets. The Indonesian government will be pleased to see these investment commitments as it is eager to increase exports from Southeast Asia’s largest economy in order to curb the wide current account deficit.

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  • Indonesia Posts a $738 Million Trade Surplus in February 2015

    Statistics Indonesia (BPS) announced on Monday (16/03) that Indonesia posted a USD $738.3 million trade surplus in February 2015, the country’s third consecutive monthly trade surplus, and higher than the forecast of Indonesia’s central bank (Bank Indonesia) and a Reuters poll which both estimated a surplus in the range of USD $500 and $520 million. The surplus was also larger than the USD $709.4 million trade surplus posted in the first month of 2015. The February surplus was particularly the result of declining imports.

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Latest Columns Export

  • Current Account Balance Indonesia: Deficit of 3.07% of GDP in Q3-2014

    The current account deficit of Indonesia eased to USD $6.84 billion, or 3.07 percent of the country’s gross domestic product (GDP) in the third quarter of 2014 (down from USD $8.69 billion, or 4.07 percent of GDP in the previous quarter). This improvement was mainly supported by a solid surplus in the country’s non-oil & gas sector, partly the result of the US economic recovery as well as resumed copper concentrate exports by Freeport Indonesia and Newmont Nusa Tenggara (after successful mining contract renegotiations).

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  • Bank Indonesia: Current Account Deficit Improved in 3rd Quarter 2014

    The wide current account deficit of Indonesia is expected to have eased in the third quarter of 2014. According to information from the country’s central bank, the current account deficit narrowed to 3.1 percent of gross domestic product (GDP) in Q3-2014 from 4.27 percent of GDP in the previous quarter. A deficit below the level of 3 percent of GDP is generally regarded as a sustainable level. The improvement in Q3-2014 is mainly due to resumed mineral exports after the government and several miners managed to finalize renegotiations.

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  • Bank Indonesia Press Release: Key Interest Rate Kept at 7.50%

    Bank Indonesia decided to hold the key interest rate (BI rate) at 7.50 percent in October, with the Lending Facility and Deposit Facility rates kept at 7.50 percent and 5.75 percent, respectively. This level is expected to help control inflation at 4.5±1 percent in 2014 and 4.0±1 percent in 2015, as well as to reduce the current account deficit to a more sustainable level. Despite stable domestic conditions, Bank Indonesia sees risks: contagion risk stemming from US monetary tightening and possible higher subsidized fuel prices.

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  • Bank Indonesia Press Release: Trade Balance and Inflation Update

    The central bank of Indonesia (Bank Indonesia) released a press statement on Wednesday evening (01/10) in which it set out its view on the country’s trade balance and inflation after the latest economic data had been released by Statistics Indonesia (abbreviated BPS) earlier on the day. Based on information of BPS, Indonesia’s September inflation was relatively low at 0.27 percent month-to-month (m/m), while the August trade balance swung back into a deficit at USD $318.1 million.

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  • Economy of Indonesia Expected to Grow 5.2 to 5.3% only in 2014

    The Indonesian government admits that it is difficult to achieve the 5.5 percent gross domestic product (GDP) growth target that was set in the Revised 2014 State Budget (APBN-P 2014). In fact, Deputy Finance Minister Bambang Brodjonegoro stated that Southeast Asia’s largest economy will have to work hard to reach +5.3 percentage point GDP growth this year. “We have to be realistic. Hopefully GDP growth will improve in the second half of 2014 to a level of 5.3 percent. The current forecast for GDP growth in 2014 is 5.2-5.3 percent,” he said.

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  • Analysis of Indonesia’s Current Account Deficit: Search for Fiscal Stability

    Governor of the central bank of Indonesia (Bank Indonesia), Agus Martowardojo, commented on Indonesia’s troubled current account balance on Tuesday (12/08). Martowardojo said that he expects the balance to improve in 2014. Last year, the current account deficit of Southeast Asia’s largest economy reached 3.3 percent of gross domestic product (GDP); a level which is generally regarded as unsustainable. This year, the deficit may ease to 3 percent of GDP. For investors the current account balance is an important matter. Why?

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  • Economic Growth of Indonesia in Second Half 2014: Slowing or Growing?

    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.

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  • Economic Growth of Indonesia Slows to 5.12% in the Second Quarter of 2014

    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?

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  • Indonesia Market Update: June Trade Balance and July Inflation

    According to Statistics Indonesia (BPS), the country’s trade balance in June 2014 recorded a deficit of USD $0.30 billion after the USD $0.05 billion surplus in the previous month. The performance of Indonesia’s trade balance was influenced by shrinkage of the country’s non-oil & gas surplus amid a lower oil & gas deficit compared to May 2014. Meanwhile, inflation was up 0.93 percent (month-to-month) in July 2014; a good performance amid the Ramadan and Idul Fitri festivities. Annual inflation eased to 4.53 percent (year-on-year).

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  • Update Economy of Indonesia; ICRA Indonesia's Monthly Review

    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 June 2014 edition, a number of important topics that are monitored include Indonesia's inflation rate, the trade balance, the BI rate, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt of the newsletter:

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