Economy of Indonesia: Inflation, Trade Balance & Manufacturing

Indonesian October Inflation

Based on today’s official data, Indonesia’s inflation rate accelerated more-than-average in October 2014. The historic average in October is below 0.1 percent m/m. This October inflation reached the highest level in five years primarily on higher electricity tariffs and volatile food prices. On a year-on-year basis, the consumer price index accelerated to 4.83 percent y/y in October 2014. Core inflation - excluding volatile food and fuel prices - increased 4.02 percent.

Inflation in Indonesia:

Month	Monthly Growth 2013	Monthly Growth 2014
January	1.03%	1.07%
February	0.75%	0.26%
March	0.63%	0.08%
April	-0.10%	-0.02%
May	-0.03%	0.16%
June	1.03%	0.43%
July	3.29%	0.93%
August	1.12%	0.47%
September	-0.35%	0.27%
October	0.09%	0.47%
November	0.12%
December	0.55%
Total	8.38%	4.19%

Indonesia’s September Trade Balance

Meanwhile, the country’s trade deficit narrowed to USD $270 million in September 2014 from USD $318 million in the previous month. The country’s trade balance has shown a structural deficit since 2011 as imports of costly oil (in order to meet domestic fuel demand) burdens the balance. The oil & gas deficit reached USD $1.03 billion in September, while the non-oil & gas sector showed a USD $760 million surplus.

Indonesian Manufacturing Activity

Indonesia's October Purchasing Manages' Index declined to 49.2 points, a 14-month low, from 50.7 in the previous month. A reading below 50 signals contraction in the manufacturing sector. Su Sian Lim, ASEAN Economist at HSBC said: "With both new orders and new export orders looking soft, and work backlogs down for a fifth straight month, the outlook for the sector remains tepid."

Foreign Tourist Arrivals

Statistics Indonesia also announced that a total of 791,296 foreign tourists visited Indonesia in September 2014, a 2.65 percent increase from the same month in 2013. This year so far, 6.9 million foreign tourist arrivals have been registered, an 8.31 percent increase from the first nine months in 2013.

Foreign Tourist Arrivals in Indonesia - 2013-2014:

Month	Tourist Arrivals 2013	Tourist Arrivals 2014
January	614,328	753,079
February	678,415	702,666
March	725,316	765,607
April	646,117	726,332
May	700,708	752,363
June	789,594	851,475
July	717,784	777,210
August	771,009	826,821
September	770,878	791,296
October	719,900
November	807,422
December	766,966
Total	8,802,129	6,946,849

^{Source: Statistics Indonesia (BPS)}

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