Below is a list with tagged columns and company profiles.

Today's Headlines Macroeconomy

  • IMF: Slowing Growth and Widening Macro-Imbalances in Indonesia

    IMF: Slowing Growth and Widening Macro-imbalances in Indonesia

    The International Monetary Fund (IMF) detects a slowdown in GDP growth in major emerging market economies and decline in commodity prices, and more recently, a reversal in push factors tied to a prospective exit from extraordinarily easy global monetary conditions, has put pressure on Indonesia’s balance of payments and heightened its vulnerability to shocks. Domestic policy accommodation and rising energy subsidies have also given rise to increased external and fiscal imbalances.

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  • Enhanced Financial Cooperation Central Banks of Indonesia and Japan

    Enhanced Financial Cooperation Central Banks of Indonesia and Japan

    The Bank of Japan (BoJ) and Bank Indonesia (BI) signed the third Bilateral Swap Arrangement (BSA) on 12 December 2013. The arrangement is an expansion of the current BSA which almost doubles the size of the facility from USD $12 billion to $22.76 billion. This arrangement also introduces a new feature in the form of a crisis prevention scheme to support potential and/or actual liquidity needs. Both institutions also agreed to establish a cross-border liquidity arrangement to enhance the stability of financial markets.

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  • Indonesia's Foreign Exchange Reserves Unchanged in November 2013

    Indonesia's Foreign Exchange Reserves Unchanged in November 2013

    The central bank of Indonesia (Bank Indonesia) announced that Indonesia’s official reserve assets totaled USD $97.0 billion at the end of November 2013 thus unchanged from the end of the previous month. Bank Indonesia stated that this amount is equivalent to 5.5 months of import or 5.3 months of import and servicing of government external debt. After having grown sharply in recent years, Indonesia's foreign exchange reserves have fallen from USD $112.8 billion at end-2012 as Bank Indonesia tried to support the depreciating rupiah exchange rate.

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  • OECD: Strong Growth in Indonesia but Takes Time to be High-Income Economy

    The latest report of the Organisation for Economic Co-operation and Development (OECD), titled "Structural Policy Challenges in Indonesia", mentions that Indonesia - with an annual GDP growth projection of about 6 percent - is estimated to be the country with the highest level of economic growth among the ASEAN countries between 2014 and 2018. The report is positive about the region's economic future that lies ahead, particularly China, despite the global crisis having managed to slow down economic expansion.

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  • Indonesia's Economic Growth in 2014: Growing or Slowing?

    Despite the World Bank and International Monetary Fund (IMF) having revised down their forecasts for Indonesia's economic growth in 2014, the Center for Economic and Public Policy Studies (Pusat Studi Ekonomi dan Kebijakan Publik) expects that the country's economy will grow stronger in 2014 than this year. In 2014, the World Bank and IMF expect Indonesia's gross domestic product to grow 5.4 percent and 5.5 percent respectively. Both estimates are 0.2 percent down from their GDP growth forecasts for the year 2013.

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  • Slowing Economic Growth: What about Indonesia's Property Sector in 2014?

    Opinions about the growth prospects of Indonesia's property sector in 2014 have turned rather negative amid the country's slowing economic expansion, tighter monetary policy (mortgage restrictions and higher down payment rules), the depreciating rupiah and uncertainties about the country's legislative and presidential elections in mid-2014. In 2012 and the first half of 2013, Indonesia's property sector had been investors' darling showing spectacular growth amid a booming economy, high housing demand and a low interest environment.

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  • In Anticipation of Tapering, Bank Indonesia May Raise its BI Rate Again

    In Anticipation of Tapering, Bank Indonesia May Raise its BI Rate Again

    Several analysts expect that the central bank of Indonesia (Bank Indonesia) will raise its key interest rate (BI rate) again in the first Semester of 2014 in order to anticipate the winding down of the Federal Reserve's monthly USD $85 billion stimulus program (quantitative easing). Currently, the BI rate is set at 7.50 percent but analysts say that the market should be prepared for a hike to 8.0 percent in the first half of 2014. Between June and November 2013, Bank Indonesia has already raised its benchmark interest rate from 5.75 to 7.50 percent.

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  • Agus Martowardojo Comments on Indonesia's Macroeconomy in 2014

    Agus Martowardojo Comments on Indonesia's Macroeconomy in 2014

    Agus Martowardojo, Governor of Indonesia's central bank, expects the Indonesian economy to consolidate in 2014. The country is currently experiencing an economic correction with GDP growth slowing to 5.62 percent in the third quarter of 2013. Martowardojo said that the current account deficit still needs time to reach a healthy level. Indonesia's current account deficit stood at USD $8.4 billion (equivalent to 3.8 percent of the country's GDP) in the third quarter of 2013, down from USD $9.8 billion (4.4 percent of GDP) in the second quarter.

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  • Fitch Ratings: Indonesia's Major Banks Able to Withstand Higher NPLs

    Fitch Ratings: Indonesia's Major Banks Able to Withstand Higher NPLs

    Despite Indonesia's macroeconomic conditions and liquidity experiencing a correction, Fitch Ratings believes that Indonesia's major banks are able to withstand a reasonably high degree of asset-quality stress, mainly due to the banks' strong standalone loss absorption cushions and likely support from highly rated foreign parent companies. Because of the banks' sound earnings buffers, they are expected to cope with the higher non-performing loans (NPLs) which are expected to emerge in the next one or two years ahead.

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  • Bank Indonesia Expects Indonesia's Economy to Grow 5.7% in 2013

    Agus Martowardojo, Governor of Indonesia's central bank (Bank Indonesia), stated that the country's economy is expected to grow 5.7 percent in 2013. Bank Indonesia believes GDP growth in the fourth quarter of 2013 to fall below the growth figure realized in Q3-2013 (5.62 percent). Martowardojo said that the government needs to continue measures to improve the country's exports, while trying to curtail imports of oil and gas as domestic demand for fuels remained high, even after the increase in prices of subsidized fuels in June 2013.

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Latest Columns Macroeconomy

  • Indonesia's Main Stock Index (IHSG): the Ship that is Rocked by a Storm

    For several weeks now, Indonesia's main stock index (IHSG) has been experiencing a sharp correction. As I wrote in my previous columns, market participants have been waiting for several important macro economic data, to wit Indonesia's economic growth figure for the second quarter of 2013, the July 2013 inflation rate, and the country's trade balance statistics for the first six months of this year. Now all above results have been released, we can analyze further the impact of these macroeconomic results as well as investors' reaction to it.

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  • Indonesia's Foreign Exchange Reserves Fall, Current Account Deficit Grows

    The foreign exchange reserves of Indonesia keep on falling from its historical peak of USD $124.64 billion in August 2011 to USD $92.67 billion at the end of July 2013. This development seems to highlight long-standing weaknesses in Indonesia's sovereign's external finances, as credit agency Fitch Ratings detected on several occasions before. The republic of Indonesia is currently characterized by four deficits, to wit a current account deficit, a balance of payments deficit, a trade balance deficit and a fiscal deficit.

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  • Slowing Growth in Indonesian Cement Sales Continues in Semester II

    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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  • Revised Tax Holiday and Tax Allowance to Attract Investments in Indonesia

    Revised Tax Holiday and Tax Allowance to Attract Investments in Indonesia

    Apart from the five tax incentives that I have mentioned in a previous column, the Indonesian government also intends to ease two other tax rules in order to boost investments in Indonesia from 2014 onwards. These are the tax holiday and tax allowance. Relaxation of the tax holiday involves an alteration to the period as well as the size of the investment, and relaxation of procedural difficulties. Relaxation of the tax allowance involves the revision of the number of sectors that are eligible and a relaxation of procedures in the form of tax clearance.

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  • Bank Indonesia Raises Interest Rate to fight Inflation and Support the Rupiah

    Today, Bank Indonesia surprised many analysts and investors by raising its benchmark interest rate by 50 bps to 6.50 percent. Indonesia's central bank assessed that this measure is the correct one with regard to supporting the IDR rupiah (which is one of the worst Asian currencies against the US dollar this year) and to fight higher inflation after the government decided to cut fuel subsidies in June. It expects inflation to peak in July at about 2.3 percent (month to month) but to moderate soon afterwards.

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  • Central Bank of Indonesia Outlines its Macroeconomic Assumptions

    Bank Indonesia Macro Economy Indonesia Investments Richard van der Schaar

    Indonesia's central bank (Bank Indonesia) expects that economic growth of Indonesia in 2013 will not meet the government's target as has been set in the revised State Budget (APNB-P). Last month, both government and parliament of Indonesia agreed on a revised GDP growth assumption of 6.3 percent. However, Bank Indonesia believes that, due to slowing domestic consumption and investments in the current global economic context, the growth is more likely to fall between 5.8 and 6.2 percent.

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  • Draghi's Statement Results in Rising Stock Indices in Europe on Thursday

    Without any support from the United States, where Wall Street was closed due to the 4th of July festivities, stock indices in Europe found their way up. President of the European Central Bank, Mario Draghi, caused positive market sentiments after stating that the interest rate will remain low for a long while and that the current monetary (easing) policy will remain unchanged. Stock indices in Germany, France, Great Britain and the Netherlands went up between 2.1 and 3.1 percent on Thursday's trading day (04/07).

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  • Two Important Questions in Indonesia's Highly Volatile Market

    Indonesia's main stock index (IHSG) moved wildly last week. During the first two days of the week, the index fell to 4,609.95 points, which is considerably below its record high level of 5,214 on 20 May 2013. However, on the last trading day of the week (14/06), a 3.32 percent recovery occurred. Generally, it were domestic market participants that supported the IHSG. Foreign market participants continued to sell parts of their Indonesian stock portfolios. Total foreign selling totaled IDR 9 trillion (USD $910.4 million) last week.

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  • Press Release of Bank Indonesia: BI Rate Raised by 25 bps to 6.00%

    Less than 24 hours after having raised the overnight deposit facility rate (known as Fasbi) by 25 bps to 4.25 percent, Indonesia's central bank (Bank Indonesia) also raised its benchmark interest rate (known as the BI rate) by 25 bps to 6.0 percent. Both these policy responses were conducted in order to support the IDR rupiah, which is one of the worst performing Asian currencies against the US dollar in 2013. Indonesia's central bank expects growing inflationary pressures as the Indonesian government intends to cut fuel subsidies this June.

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  • Indonesia's Current Account Deficit Improves in the First Quarter of 2013

    Indonesia's central bank (Bank Indonesia or BI) announced on Wednesday (15/05/13) that the country's external balance has improved during Q1-2013 as non-oil and gas trade were up. Indonesia's current account deficit stood at USD $5.3 billion (2.4 percent of GDP) in Q1-2013, compared to the previous quarter's deficit of USD $7.6 billion (3.5 percent of GDP). Indonesia has experienced a widening trade deficit, although it recorded a trade surplus of USD $304.90 in March, the first trade surplus since September 2012.

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