Below is a list with tagged columns and company profiles.

Today's Headlines Macroeconomy

  • Indonesia Investments' Newsletter of 17 August 2014 Released

    On 17 August 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 topics such as the performance of the rupiah exchange rate, plantations, Freeport Indonesia, economic growth, electricity, property, guidelines for the construction of a PT PMA, and more.

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  • Bank Indonesia Expected to Keep Key Interest Rate (BI Rate) at 7.50%

    The central bank of Indonesia (Bank Indonesia, BI) is expected to keep its benchmark interest rate (BI rate) at 7.50 percent at Thursday’s Board of Governors’ Meeting (14/08) as inflation has eased to 4.53 percent (year on year) in July while the country’s current account deficit may nearly double in the second quarter of 2014 to four percent of gross domestic product (GDP) from 2.06 percent of GDP in the previous quarter. Most analysts expect that Bank Indonesia will maintain the current BI rate for the remainder of 2014.

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  • Foreign Exchange Reserves at Bank Indonesia Rise to $110.5 Billion in July

    The central bank of Indonesia (Bank Indonesia) announced today (08/08) that the country’s foreign exchange reserves increased to USD $110.5 billion at the end of July 2014 (from USD $107.7 billion at the end of the previous month). Bank Indonesia said that the rising reserves were mainly due to receipts from the Euro bonds issued by the Indonesian government and foreign exchange earnings from oil and gas exports. In addition, buoyant foreign capital inflows also had a positive impact on the accumulation of the official reserve assets.

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  • Bank Indonesia Comments on Slowing Economic Growth in Q2-2014

    Indonesia’s gross domestic product (GDP) growth in the second quarter of 2014 slowed to 5.12 percent (year-on-year, yoy), thus decelerating compared to the nation’s GDP growth in the previous quarter (5.22 percent yoy). The Q2-2014 GDP growth result was lower than the figure that was projected by the central bank of Indonesia (Bank Indonesia). The institution previously stated that it expected Q2-014 economic growth to reach 5.3 percent (yoy). Below are some comment of Bank Indonesia on economic growth in the second quarter.

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  • Chatib Basri: Indonesia’s Economic Growth May Reach 5.5% in 2014

    In response to the recent World Bank report that projects economic growth of Indonesia at 5.2 percent (year-on-year, yoy) in 2014, the Indonesian government is still optimistic that gross domestic product (GDP) growth of Southeast Asia’s largest economy can reach 5.5 percent this year. Indonesian Finance minister Chatib Basri said that household consumption, which traditionally accounts for about 55 percent of the country’s total economic growth, is expected to remain strong in 2014 and thus support GDP growth.

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  • Indonesian Government Implements 3rd Fiscal Stimulus Package in July

    Indonesian Government Implements 3rd Fiscal Stimulus Package in July

    The Indonesian government plans to introduce its 3rd fiscal policy package, aimed at boosting investments in Indonesia, this month. Deputy Finance Minister Bambang Brodjonegoro said that it involves tax incentives (tax allowance and tax holidays). The government will also make it more attractive for foreign companies to re-invest profits in Indonesia. Coordinating Economic Minister Chairul Tanjung added that a dividend tax exemption for both domestic and foreign investors is possible, provided that dividend is re-invested in Indonesian assets.

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  • Foreign Exchange Reserves at Bank Indonesia Rise Slightly in June 2014

    The central bank of Indonesia (Bank Indonesia, BI) released a statement on Monday (07/07) which shows that the country’s foreign exchange reserves have expanded 0.7 percent to USD $107.7 billion in June 2014 mainly on an increase of the government’s oil & gas revenue (that exceeds the foreign debt payment) and higher foreign-exchange term deposits at local banks, reducing the need for Bank Indonesia to intervene in the foreign exchange market. However, the central bank did not provide any figures on these revenues and deposits.

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  • Chatib Basri: Indonesian Economy May Grow 5.3% in Second Quarter of 2014

    Chatib Basri: Indonesian Economy May Grow 5.3% in Second Quarter of 2014

    Finance Minister of Indonesia, Chatib Basri, expects the Indonesian economy to grow 5.3 percent (year-on-year, yoy) in the second quarter of 2014 because of improved household consumption supported by the legislative and presidential elections in 2014. Meanwhile, Indonesian exports are also expected to have improved slightly from its performance in the first quarter of the year due to improved economic conditions in Europe. However, demand from China and Japan remained sluggish. In Q1-2014, GDP growth slowed to 5.21 percent (yoy).

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  • Indonesia Investments' Newsletter of 29 June 2014 Released

    On 29 June 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 topics such as business confidence, the looming middle income trap, a forecast for inflation and the trade balance, the updated company profile of Indosat, a new IPO, news surrounding the presidential election, and more.

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  • Economy of Indonesia: Government Targets GDP Growth of 5.8% in 2015

    The Indonesian government is optimistic that the country’s economic growth will accelerate to 5.8 percent (year-on-year) in 2015 from an expected growth pace of 5.5 percent in 2014. The key to next year’s improved gross domestic product (GDP) growth of Indonesia is the higher forecast for global economic growth. In 2015, the world economy is estimated to grow 3.9% (yoy), higher than the outlook for this year’s growth at 3.6 percent. As such, the government’s outlook is in line the central bank’s GDP growth forecast in the range of 5.4 to 5.8 percent.

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Latest Columns Macroeconomy

  • Indonesia Economic Update & Analysis: Opportunities Arise?

    It seems clear now how market conditions will be until the end of the year. Two important foreign issues - the US Federal Reserve's tapering of quantitative easing (QE3) as well as the US debt ceiling issue which resulted in a shutdown as the Democrats and Republicans failed to come to an agreement on the country's federal budget - and various economic data from Indonesia (inflation and the trade balance) have provided some more insight into the matter. I will discuss each topic one by one below.

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  • Indonesia's Inflation Eases to 8.40% as September Shows Deflation of 0.35%

    After three months of high monthly inflation rates, Indonesia's inflation eased in September due to falling prices of food, transportation, communications and financial services after the Muslim celebrations of Idul Fitri, which always cause a spike in inflation, have passed. In September 2013, Indonesia posted deflation of 0.35 percent. It was the first time in 12 years that the country posted deflation in this month. The annual inflation rate eased to 8.40 percent from 8.79 percent in August 2013.

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  • Bank Indonesia Press Release: August Trade Surplus, September Deflation

    Inflationary pressures eased in September 2013 to a 0.35% rate of deflation (mtm), or 8.40% (yoy). The rate of deflation exceeded the projections contained within the Price Monitoring Survey conducted by Bank Indonesia and much lower than inflation expectations by some analysts. Abundant supply in the wake of horticultural harvests (shallots and chilli peppers), triggered a deep correction in food prices. In addition, sliding beef prices also exacerbated further deflationary pressures, with volatile foods recording deflation of 3.38% (mtm).

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  • Indonesia's Economic Growth in Q3-2013 Expected to Fall below 5.8%

    Indonesia's Economic Growth in Q3-2013 Expected to Fall below 5.8%

    The slowdown of Indonesia's economic growth is expected to continue into the third quarter of 2013. The Indonesian government predicts that economic growth will fall below the GDP growth figure realized in the second quarter (5.8 percent). Acting Head of the Fiscal Policy Agency Bambang Brodjonegoro stated that the main factor that causes the country's slowing economic growth in Q3-2013 is reduced household consumption. Domestic consumption in Indonesia accounts for about 55 percent of the country's GDP growth.

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  • No Tapering is Bullish? The Federal Reserve Playing with the Global Market

    Starting from May 2013, Indonesia's benchmark stock index (IHSG) has been on a weakening (bearish) trend inflicted by various reasons. First, in early May, Standard & Poor's downgraded Indonesia's credit rating due to the government's hesitancy to slash fuel subsidies. Then, the Federal Reserve started to speculate about ending its quantitative easing program. Capital outflows that followed indicated the vulnerable state of the Indonesian economy. Moreover, the controversial hike in fuel prices in late-June resulted in high inflation.

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  • Indonesia's Falling Cement Sales in August 2013 Indicate Slowing Economy

    Indonesia's Falling Cement Sales in August 2013 Indicate Slowing Economy

    According to data from the Indonesian Cement Association (ASI), domestic cement sales have fallen 5.8 percent to 3.3 million tons in August 2013 (from the same month last year). Being an important indicator of economic expansion (as cement sales inform about the development of property and infrastructure projects in the country), these lower cement sales confirm the slowing pace of economic growth in Indonesia. Compared to July 2013, cement sales in Indonesia fell by a massive 32 percent.

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  • World Bank: Logistics Costs Reduce Economic Potential of Indonesia

    World Bank Report: Logistic Costs Reduce Economic Potential of Indonesia

    In its most recent report regarding Indonesia's economy, the World Bank states that high logistic costs form a serious impediment to the country's economic growth. The report, titled Annual Logistics Report, is compiled by Bandung Institute of Technology’s Research Center for Logistics and Supply Chains, the Indonesian Logistics Association (ALI), the STC Group, Panteia Research Institute, and the World Bank Indonesia Office. The report provides an analysis and overview of the progress made in tackling the problem of logistics in Indonesia.

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  • Indonesia Jumps to No. 38 in Global Competitiveness Index 2013-2014

    Indonesia Jumps to No. 38 in Global Competitiveness Index 2013-2014

    In recent weeks, Indonesia has to cope with a large amount of negative publicity as large capital outflows from the country's financial markets occurred, partly due to weak economic results regarding the current account balance, inflation and the the rupiah. Interest rates are rising, thus eroding people's purchasing power and consequently curbing economic growth. However, the Global Competitiveness Index 2013-2014, released by World Economic Forum, contained a positive outcome for Southeast Asia's largest economy.

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  • Fitch Ratings: Major Indonesian Banks Resilient Against Market Turmoil

    Fitch Ratings: Major Indonesian Banks Resilient Against Market Turmoil

    According to global credit rating and research agency Fitch Ratings, Indonesia's major banks are robust against the rupiah currency slide due to their low unhedged foreign currency exposure, strong loss-absorption cushions and - in some cases - foreign ownership. The slowdown in the economy will weigh on these (rated) banks' operating environment, but is unlikely to damage their credit profiles to any great extent. Below we provide Fitch Ratings' report. This report can also be accessed on their website.

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  • Indonesia Manufacturing PMI Contracts Sharply in August 2013

    Indonesia Manufacturing PMI Contracts Sharply in August 2013

    HSBC's latest release of the Indonesia Manufacturing PMI did not paint a positive picture as Indonesia's manufacturing activity was reported to have contracted sharply in August 2013. The index declined to a 15-month low amid a contraction of output, new orders and export business. Payroll numbers fell at the fastest rate in the history of the HSBC survey. The August index stood at 48.5, down from 50.7 in July 2013, and marks the fourth consecutive month of decline. A reading below 50.0 indicates a contraction in manufacturing activity.

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