Indonesia October Inflation, Manufacturing PMI & Tourism Update
In line with estimates, Indonesia posted 0.08 percent (m/m) deflation in October 2015. Deflation was primarily caused by lower food prices in Southeast Asia's largest economy. Annual inflation eased to 6.25 percent (y/y) and is expected to ease more markedly in the last two months of the year as the impact of last year November's subsidized fuel price hike will be swept away from inflation figures. Indonesia's core inflation - which excludes volatile food and administered prices - was 5.02 percent (y/y) in October.
Statistics Indonesia (BPS) stated that lower (food) commodity prices included red/green chilies (pepper), chicken meat, and eggs. Also lower electricity tariffs and fuel prices contributed to Indonesia's October deflation.
Calendar year inflation slowed to 2.16 percent. Indonesia's central bank (Bank Indonesia) targets inflation in the range of 3 to 5 percent (y/y) in 2015. Provided no inflationary shocks emerge in the last two months of 2015, inflation realization may fall slightly below Bank Indonesia's target range.
For an analysis and overview of inflation in Indonesia, visit our Consumer Price Index page.
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% | 0.39% |
September | -0.35% | 0.27% | -0.05% |
October | 0.09% | 0.47% | -0.08% |
November | 0.12% | 1.50% | |
December | 0.55% | 2.46% | |
Total | 8.38% | 8.36% | 2.16% |
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
Manufacturing Activity Indonesia
Meanwhile, Indonesia's manufacturing activity continued to contract in October, mainly on a sharp fall in new orders (from abroad). It was the 13th consecutive month in which Indonesia's manufacturing sector contracted. According to the latest survey from Nikkei, released today (02/11), Indonesia's October manufacturing purchasing managers' index (PMI) stood at 47.8 (a reading below 50.0 indicates contraction).
Indonesia - Purchasing Managers' Index (PMI):
Due to weak new orders it is difficult for Indonesian manufacturing companies to absorb labor, Markit Economist Pollyanna De Lima said. Moreover, although the rupiah has strengthened in recent weeks (against the US dollar), imports of raw materials are still costly. The Indonesian rupiah has depreciated 10 percent against the greenback so far this year.
Indonesian Rupiah versus US Dollar (JISDOR):
| Source: Bank IndonesiaTo end on a positive note, Indonesia's October manufacturing PMI improved from the reading of 47.4 in the preceding month.
Foreign Visitor Arrivals into Indonesia
BPS also announced that Indonesia's foreign tourist arrivals increased 9.84 percent (y/y) to 869,179 in September 2015.
In the January-September 2015 period, foreign visitor arrivals to Indonesia rose 3.5 percent to 7.2 million people. However, this pace is not enough to meet the government target of welcoming 10 million foreign tourists in Indonesia in full-year 2015.
For a detailed overview and analysis of Indonesia's tourism industry (which includes government targets and policy changes), visit our Tourism Industry page.
Foreign Tourist Arrivals in Indonesia, 2013-2015:
Month | Tourist Arrivals 2013 |
Tourist Arrivals 2014 |
Tourist Arrivals 2015 |
January | 614,328 | 753,079 | 723,039 |
February | 678,415 | 702,666 | 786,653 |
March | 725,316 | 765,607 | 789,596 |
April | 646,117 | 726,332 | 749,882 |
May | 700,708 | 752,363 | 793,499 |
June | 789,594 | 851,475 | 815,148 |
July | 717,784 | 777,210 | 814,233 |
August | 771,009 | 826,821 | 850,542 |
September | 770,878 | 791,296 | 869,179 |
October | 719,900 | 808,767 | |
November | 807,422 | 764,461 | |
December | 766,966 | 915,334 | |
Total | 8,802,129 | 9,435,411 | 7,191,771 |
Foreign Tourist Arrivals in Indonesia, 2007-2015:
2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |
Foreign Tourists (in millions) |
5.51 | 6.23 | 6.32 | 7.00 | 7.65 | 8.04 | 8.80 | 9.44 | 10.0¹ |
¹ indicates government target
Source: Statistics Indonesia (BPS)
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