Indonesia Economic Outlook
October 20, 2020
After GDP fell sharply in Q2, economic conditions likely remained muted in Q3, with elevated infection rates limiting any rebound. Retail sales fell markedly in July and August—albeit at a softer rate than in Q2—suggesting still-subdued private consumption. Moreover, exports declined throughout Q3, while the manufacturing PMI returned to contractionary territory in September amid the reimposition of large-scale restrictions in Jakarta. Turning to Q4, the easing of restrictions in Jakarta from early October should aid momentum, although still-high Covid-19 cases risk renewed lockdowns. Also in early October, parliament approved the “omnibus” bill, overhauling business, labor and environmental laws. The bill loosens limits on FDI, liberalizes the labor market and streamlines the process of obtaining business and environmental permits, and should support the economy ahead.Indonesia Economic Growth
The economy is set to rebound next year, supported by fiscal and monetary stimulus. The omnibus bill could also buoy investment to an extent. However, uncertainty over the evolution and duration of the pandemic clouds the outlook. The possible poor execution of spending measures—which limited the effectiveness of the fiscal response earlier this year—is a further risk. FocusEconomics Consensus Forecast panelists expect GDP to expand 5.0% in 2021, which is down 0.2 percentage points from last month’s forecast. In 2022, GDP is seen growing 5.2%.Indonesia Economy Data
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Indonesia Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 7.10 | -0.05 % | Dec 31 |
| Exchange Rate | 13,883 | 0.05 % | Jan 01 |
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Indonesia Economic News
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Indonesia: Government approves omnibus law, boding well for medium-term investment
October 15, 2020
In early October, parliament approved the long-awaited “omnibus” bill, which will markedly overhaul the country’s business, labor and environmental regulations with a view to boosting competitiveness.
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Indonesia: Merchandise exports decrease at a milder pace in September
October 15, 2020
Merchandise exports fell 0.5% annually in September (August: -8.2% year-on-year), as higher non-energy exports largely offset lower energy exports.
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Indonesia: Central Bank maintains rates for third month running in October
October 13, 2020
At its 12–13 October monetary policy meeting, Bank Indonesia (BI) voted to leave the seven-day reverse repo rate at a multi-year low of 4.00%.
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Indonesia: Decline in retail sales softens in August
October 8, 2020
Retail sales decreased 9.2% in year-on-year terms in August, which was a smaller contraction than July's 12.3% decrease.
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Indonesia: Inflation rises in September, but remains muted
October 1, 2020
Consumer prices dropped a seasonally-adjusted 0.05% in September over the previous month, matching August's reading and driven chiefly by lower food prices.
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