Political, Economic & Social Developments in Indonesia: February 2021 Report
On 5 March 2021 Indonesia Investments released its latest monthly report in which key developments are discussed that impact on the country's business and investment environments, most notably the 'positive investment list' (a derivative regulation of the Omnibus Law on Job Creation) and the establishment of Indonesia's sovereign wealth fund (which will focus on infrastructure development).
Another important topic is gross domestic product (GDP). Statistics Indonesia (BPS) released Indonesia's Q4-2020 (and thus also full-year 2020) GDP data. So, this enables us to take a look at how the COVID-19 crisis is affecting the economy of Indonesia. Unfortunately, the economic recession - as expected - continued into Q4-2020. Fortunately, however, we see easing pressures on economic activity. And although we expect the recession to continue into Q1-2021, negative growth should be very limited in the first quarter of 2021 (approaching the zero threshold).
We also discuss rising poverty in Indonesia in this report. Negative economic growth has caused a clear increase in poverty across Indonesia, with the urban centers on Java particularly affected. This too is in line with expectations as the government's self-imposed COVID-19 social and business restrictions drag down consumption, production, trade, and investment in an unprecedented manner. The urban environments, where there is a bigger concentration of people and more economic activity takes place (compared to rural environments), will therefore be affected more adversely.
Another topic discussed in this edition is Indonesia's coal mining industry. With coal prices having climbed in recent months (particularly thanks to China), there is a breath of fresh air in this industry. And while coal production in Indonesia is expected to rise in the decades ahead (and domestic coal consumption projected to grow on the back of the country's energy program, which involves many coal-fired power plants), there is concern about investment in exploration in the coal mining industry (although rising coal prices should now start to encourage investment).
Other topics discussed in the February 2021 report are inflation, trade, manufacturing, and monetary policy (with Bank Indonesia, again, having cut its benchmark interest rate, while imposing zero down payment regulations - under certain conditions - for purchases of property and cars/motorcycles).
The February 2021 report can be ordered by sending an email to info@indonesia-investments.com or a message to +62.882.9875.1125 (including WhatsApp).
Price of this (electronic) report:
Rp 150,000
USD $10,-
EUR €10,-
Take a glance inside the report here!
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Poll Indonesia Investments
Your Opinion About the Indonesian Government's COVID-19 Strategies (PEN, PSBB/PPKM, Vaccines)?
Voting possible: -
Results
- The government should do more to combat the crisis (31.9%)
- No opinion (29%)
- The government's policy approach is good enough (16.8%)
- The gov't did too much, thereby damaging the economy (15.3%)
- Raising capacity in the health industry is enough (7%)
Total amount of votes: 589
Bahas
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