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Today's Headlines Macroeconomy

  • Indonesia's Unemployment Rate Rises Slightly in August 2013

    Indonesia's unemployment rate rose slightly in August 2013 from the same month last year. The country's open unemployment rate rose from 6.14 percent to 6.25 percent (of the total labour force). In absolute numbers this translates to 7.4 million jobless Indonesians. Head of Statistics Indonesia, Suryamin, said that Indonesia's slowing economic growth was the main reason for the rise in unemployment, while the supply of human resources increased. In the third quarter of 2013, Indonesia's GDP growth fell to 5.62 percent (yoy).

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  • Bank Indonesia: Indonesia's October Inflation Likely to Fall Below 0.26%

    Perry Warjiyo, Deputy Governor of Indonesia's Central Bank (Bank Indonesia), expects that the inflation rate in October 2013 will fall below 0.26 percent (which is the average October inflation rate since 2007). Warjiyo said that a survey of Bank Indonesia indicated that up to the third week of October, inflation had only reached 0.06 percent. Low inflation - or preferably deflation - is needed to curb Indonesia's current high inflation rate. In September 2013, annual inflation was recorded at 8.40 percent.

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  • Bank Indonesia: Indonesia's External Debt Growth Slowing in August 2013

    Indonesia’s foreign debt was recorded at USD $257.30 billion in August 2013, a 0.9 decrease compared to foreign debt in July 2013 (USD $259.61 billion). On an annual basis (yoy), foreign debt growth in August was 6.6 percent, thus slowing compared to July’s growth of 7.4 percent (yoy). The central bank of Indonesia (Bank Indonesia) considers that the slowing growth in the country's foreign debt is in line with the slowing growth of the domestic economy. Indonesia's GDP growth forecast has been revised down to below the six percent mark.

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  • Sovereign Credit Rating of Indonesia held at BBB-/stable outlook

    The Rating and Investment Information Inc (R&I), a rating agency from Japan, kept Indonesia’s Sovereign Credit Rating at BBB- with a stable outlook. In their press release, R&I stated that the four key factors behind the decision are: (a) Indonesia’s capacity to achieve sustainable economic growth in the long term (at around six percent per year); (b) conservative fiscal management (causing a marginal fiscal deficit); (c) a sound banking sector; and (d) a low level of government debt.

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  • Indonesia's Current Account Deficit May Moderate to 2.6% in 2014

    A senior official at Indonesia's central bank (Bank Indonesia) stated that the country's current account deficit is expected to ease to 2.5 - 2.7 percent of Indonesia's gross domestic product (GDP) by 2014. In the second quarter of 2013, the account deficit reached USD $9.8 billion or 4.4 percent of GDP in Q2-2013, an alarmingly high figure that has caused much concern among the investor community. This deficit is particularly brought on by a large deficit in the country's oil & gas sector in combination with strong domestic demand for imports.

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  • Indonesia's Foreign Exchange Reserves Grow 2.8% in September 2013

    The central bank of Indonesia (Bank Indonesia) announced that Indonesia's foreign exchange reserves have increased slightly in September 2013. On 30 September, the reserves stood at USD $95.67 billion, a 2.88 percent increase from USD $92.99 billion one month earlier. The reserves in September are equivalent to 5.4 months of imports, or 5.2 months when servicing of government external debt is included. Recent US dollar demand for the import of oil is what put pressure on the reserves.

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  • World Bank: Indonesia's Resilience Tested, Adjustment Continues

    Indonesia’s economy continues to adjust, as weaker commodity prices, tighter international financing, and slowing domestic demand moderate the growth rate to 5.6 percent for 2013. This downward revision is discussed in the latest edition of the World Bank’s Indonesia Economic Quarterly (IEQ). Further moderation of growth (at 5.3 percent) may be expected in 2014, with growth in high income economies firming but international market conditions likely remaining volatile.

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  • Indonesian Government Expects Trade Deficit to Ease to USD $4 Billion

    Indonesia's trade deficit is expected to amount to USD $4 billion by the end of 2013, implying a moderation from the USD $5.54 billion deficit that emerged between January and August 2013. Indonesia's exports are forecast to decline by about 5 percent in the remainder of 2013 due to the weak global environment, particularly with the current ongoing political uncertainties in the USA. As such, in order to combat the deficit, the government intends to limit imports. Next year, Indonesia will most likely continue to post a trade deficit.

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  • Bank Indonesia and China Extend Bilateral Currency Swap Arrangement

    Bank Indonesia and China Extend Bilateral Currency Swap Arrangement

    Governor of Bank Indonesia, Agus Martowardojo and Governor of the People’s Bank of China, Zhou Xiaochuan, signed an extension to the Bilateral Currency Swap Arrangement (BCSA), representing a tangible manifestation of strong financial cooperation between both central banks in the areas of monetary policy and financial system stability. “The agreement reflects regional commitment in the face of global uncertainty and will contribute propitiously towards maintaining macroeconomic and domestic financial stability,” emphasized Martowardojo.

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  • Indonesian Government Preparing Additional Policy Approach Package

    The government of Indonesia is busy preparing an extra package of policy responses aimed at stabilizing Indonesia's financial markets. Previously, the government had released a sort of 'rescue package' in late August after the rupiah depreciated sharply and the country's stock indices plunged. Panic had emerged due to the looming end of the Federal Reserve's quantitative easing program. Coupled with internal issues, it resulted in robust capital outflows from Indonesia. The new package will be released in October.

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Latest Columns Macroeconomy

  • GDP in Focus: Analysis Indonesia's 5.04% Economic Growth in Q4-2015

    GDP in Focus: Analysis of Indonesia's 5.04% Economic Growth in 2015

    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.

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  • World Bank Releases Indonesia Economic Quarterly "Reforming amid Uncertainty"

    World Bank Releases Indonesia Economic Quarterly "Reforming amid Uncertainty"

    Today, the World Bank released the latest edition of its flagship publication Indonesia Economic Quarterly, entitled "Reforming amid Uncertainty". In this edition the Washington-based institution states that global conditions remain unfavorable despite financial markets having stabilized since October. Meanwhile, the country was negatively affected by severe man-made forest fires and toxic haze which cost Indonesia an estimated IDR 221 trillion (USD $16 billion or 1.9 percent of the country's gross domestic product) in five months.

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  • World Bank Releases October 2015 Indonesia Economic Quarterly

    World Bank Releases October 2015 Indonesia Economic Quarterly

    Today (22/10), the World Bank released the October 2015 edition of its flagship Indonesia Economic Quarterly, titled "In Times of Global Volatility". In the report the World Bank states that despite current ongoing global uncertainties (caused by looming monetary tightening in the USA and China's economic slowdown), which make macroeconomic management difficult in the year ahead, pro-active government action could offset the negative impact and may help to boost growth.

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  • Economic Update Indonesia: Stocks, Rupiah, Infrastructure & Economy

    Economic Update Indonesia: Stocks, Rupiah, Infrastructure & Economy

    Ahead of the release of Indonesia’s official first quarter GDP growth figure (scheduled to be released in the first week of May), Indonesian stocks fell and the rupiah depreciated (slightly) against the US dollar on the back of weak market sentiments that have plagued Indonesian markets over the past week. Most importantly, weaker-than-expected Q1-2015 corporate earnings reports of listed Indonesian blue chips have made market participants concerned that Indonesia’s economic slowdown has continued into the first quarter of 2015.

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  • Slowing Economic Growth Indonesia to Continue in Q1-2015?

    Slowing Economic Growth Indonesia to Continue in Q1-2015?

    Within a couple of days Statistics Indonesia (BPS) is scheduled to release Indonesia’s GDP growth figure for the first quarter of 2015. Despite economic growth forecasts for full-year 2015 - both of the Indonesian government and international institutions such as the World Bank, International Monetary Fund (IMF) and Asian Development Bank (ADB) - signalling a rebound from the five-year low of 5.02 percent (y/y) in 2014, various analysts expect to see further slowing economic growth in Q1-2015.

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  • Mutual Fund Management in Indonesia: Plenty Room for Growth

    After Indonesia’s political year of 2014 ended, financial institutions expect to experience better times in 2015. Last year, economic growth of Indonesia slowed to a five-year low of 5.02 percent (y/y) due to weak exports, the high domestic interest rate environment, and political uncertainties caused by Indonesia’s legislative and presidential elections. This year, however, economic growth is expected to accelerate - albeit slightly - implying stronger purchasing power. One of the businesses that will profit is mutual fund management.

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  • Asian Development Bank: Economy of Indonesia to Grow 5.5% in 2015

    The Asian Development Bank (ADB) released a report today (24/03) in which it discusses recent economic developments in Indonesia. According to the report, Indonesia’s economic growth is projected to accelerate over the two years ahead provided that the Indonesian government continues to implement structural policy reforms. Such reforms - which include the acceleration of infrastructure development, reduction of logistical costs, and enhancing budget implementation - should lead to an improvement of the investment climate.

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  • Economy of Indonesia: Inflation, Trade, Interest Rates & Rupiah Update

    Indonesia’s consumer price index fell for the second consecutive month in February 2015, recording deflation of 0.36 percent month-on-month (m/m) in February, while on an annual basis Indonesian inflation eased to 6.29 percent (y/y), down from 6.96 percent (y/y) in the preceding month. Inflationary pressures declined primarily on the back of lower prices of chili peppers and fuel. Easing inflation in Southeast Asia’s largest economy may provide room for Indonesia’s central bank (Bank Indonesia) to cut interest rates further this year.

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  • Bank Indonesia Lowers Key Interest Rate in Surprise Move

    In a surprise move, the central bank of Indonesia (Bank Indonesia) decided to lower its key interest rate (BI rate) by 25 basis points to 7.50 percent at the Board of Governor’s Meeting on Tuesday (17/02). The deposit facility rate (Fasbi) was also lowered by 25 basis points (to 5.50 percent), while the lending facility rate remained steady at 8.00 percent. In a press release the central bank stated that the current policy direction is estimated to moderate the country’s wide current account deficit further, while inflation remains under control.

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  • Economic Update Indonesia: What about Economic Growth in 2015?

    Although Indonesia’s economic growth slowed further in 2014, there is optimism that growth will accelerate in 2015 despite sluggish global economic conditions (curbing Indonesia’s export performance) and Bank Indonesia’s relatively high interest rate environment. Indonesia’s central bank has raised its BI rate several times over the past one and a half years in an effort to combat high inflation (caused by fuel price hikes), curb capital outflows ahead of US monetary tightening, limit the current account deficit and support the rupiah.

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