2016 State Budget Draft Indonesia: Capital Injections State Companies

Most of these funds - roughly 48 percent of total planned capital injections - will be disbursed to SOEs engaged in the country's infrastructure and maritime sectors. Several projects that are to see groundbreaking in 2016 include four toll roads on the island of Sumatra, a new runway at the Soekarno-Hatta International Airport (nearby Jakarta), and the high-speed rail line from Jakarta to Bandung (West Java).

Regarding food and energy security development in 2016, the Indonesian government aims to start the construction of rice processing and storage facilities and two geothermal power plants in Dieng (Central Java) and Patuha (West Java).

The government added that, considering sluggish corporate earnings reports so far in 2015, it may cut dividend payments (from SOEs) by 16 percent in 2016 in order to give these SOEs more room for investment.

Below are 19 of the total 24 SOEs that are planned to receive a capital injection next year (several are listed on the Indonesia Stock Exchange):

State Owned Enterprise (SOE)	Capital Injection
Perusahaan Listrik Negara (PLN)	IDR 10 trillion
Sarana Multi Infrastruktur	IDR 5 trillion
Hutama Karya	IDR 3 trillion
Wijaya Karya	IDR 3 trillion
Pembangunan Perumahan (PP)	IDR 2 trillion
Perum Bulog	IDR 2 trillion
Angkasa Pura II	IDR 2 trillion
Krakatau Steel	IDR 1.5 trillion
Jasa Marga	IDR 1.25 trillion
Geo Dipa Energi	IDR 1.16 trillion
Industri Kereta Api	IDR 1 trillion
Penjamin Infrastruktur Indonesia	IDR 1 trillion
Sarana Multigriya Finansial	IDR 1 trillion
Perusahaan Perdagangan Indonesia	IDR 500 billion
Barata Indonesia	IDR 500 billion
Bahana Pembinaan Usaha Indonesia	IDR 500 billion
Askrindo	IDR 500 billion
Perum Jamkrindo	IDR 500 billion
Reasuransi Indonesia Utama	IDR 500 billion

In the 2016 State Budget draft, the Indonesian government targets to reach an economic growth figure of 5.5 percent (year-on-year), inflation at 4.7 percent (y/y), and a rupiah at IDR 13,400 per US dollar. These are ambitious targets and will require serious government effort as well as a conducive global context.

In the second quarter of 2015, Indonesia’s GDP growth slowed to a six-year low of 4.67 percent (y/y), from 4.72 percent (y/y) in the preceding quarter. As such, full year 2015 growth is expected to hover around the 5.0 percent (y/y) mark (this assumption is based on improved government spending in the second half of the year).

Indonesia's Quarterly GDP Growth 2009–2015 (annual % change):

Year	Quarter I	Quarter II	Quarter III	Quarter IV
2015	4.72	4.67
2014	5.14	5.03	4.92	5.01
2013	6.03	5.81	5.62	5.72
2012	6.29	6.36	6.17	6.11
2011	6.45	6.52	6.49	6.50
2010	5.99	6.29	5.81	6.81
2009	4.60	4.37	4.31	4.58

^{Source: Statistics Indonesia (BPS)}

Meanwhile, inflation is currently still high at 7.26 percent (y/y), above the full year target of Indonesia’s central bank (4.0 - 5.0 percent y/y). However, Indonesian inflation is expected to ease markedly in the last quarter of the year as the impact of last year November’s subsidized fuel price hike wanes.

 Inflation in Indonesia:

Month	Monthly Growth           2013	Monthly Growth           2014	Monthly Growth           2015
January	1.03%	1.07%	-0.24%
February	0.75%	0.26%	-0.36%
March	0.63%	0.08%	0.17%
April	-0.10%	-0.02%	0.36%
May	-0.03%	0.16%	0.50%
June	1.03%	0.43%	0.54%
July	3.29%	0.93%	0.93%
August	1.12%	0.47%
September	-0.35%	0.27%
October	0.09%	0.47%
November	0.12%	1.50%
December	0.55%	2.46%
Total	8.38%	8.36%	1.90%

^{Source: Statistics Indonesia (BPS)}

Inflation in Indonesia 2008-2014:

	2008	2009	2010	2011	2012	2013	2014
Inflation (annual percent change)	9.8	4.8	5.1	5.4	4.3	8.4	8.4

^{Source: World Bank}

Lastly, the rupiah has been under serious pressure due to external factors. Amid monetary tightening in the USA and China’s recent yuan devaluation the rupiah has slid beyond the IDR 13,800 per US dollar mark.

Indonesian Rupiah versus US Dollar (JISDOR):

| Source: Bank Indonesia

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