Indonesia Economic Outlook
March 20, 2018According to available indicators, the economy continued to perform robustly in Q1. Consumer confidence remained elevated in the first two months of the year: This, together with declining inflation, bodes well for private consumption, a picture only partially obscured by a dip in retail sales in January. Moreover, the manufacturing PMI returned to positive territory in February pushed up by rising output and new orders, suggesting fixed investment continued to expand healthily on the back of the government’s ongoing infrastructure push. However, S&P Global Ratings recently warned that the current increase in development spending risks deteriorating the balance sheets of state-owned enterprises (SOEs) and thus affecting the banking system. As the government aims to lower the fiscal deficit, SOEs are borrowing heavily to finance infrastructure projects, which is translating into higher leverage levels. If protracted, this trend could force SOEs to scale down investment spending or turn to the public coffers for recapitalization.
Indonesia Economic GrowthA strong expansion in public infrastructure spending and rising private investment and FDI inflows on the back of higher commodity prices will spur growth this year. Moreover, relatively subdued inflationary pressures and an accommodative monetary policy will support private consumption. However, faster hikes in U.S. interest rates could drive capitals out of the country, prompting a tightening in financing conditions and weakening the currency. FocusEconomics panelists see GDP expanding 5.3% in 2018, unchanged from last month’s forecast. In 2019, the economy is seen growing 5.4%.
Indonesia Economy Data
5 years of Indonesia economic forecasts for more than 30 economic indicators.
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|Bond Yield||6.75||-0.05 %||Apr 20|
|Exchange Rate||13,878||0.05 %||Apr 20|
|Stock Market||6,338||-0.32 %||Apr 20|
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Indonesia Economic News
April 20, 2018
At its 18 and 19 April monetary policy meeting, Bank Indonesia decided to make no changes to interest rates, holding the BI seven-day Reverse Repo rate at 4.25%.
April 16, 2018
According to Statistics Indonesia (BPS), the country recorded a trade surplus of USD 1.1 billion in March, swinging from the revised USD 52 million deficit recorded in February (previously reported: USD 116 million deficit).
April 10, 2018
In February, retail sales rose 1.5% over the same month of the previous year, contrasting January’s 1.8% contraction.
April 3, 2018
In March, consumer prices increased 0.20% compared to the previous month, which was slightly above February’s 0.17% month-on-month rise.
April 3, 2018
Conditions in Indonesia’s manufacturing sector remained expansionary but deteriorated in March, according to Nikkei and IHS Markit.