Inflation in Indonesia is expected to have eased to 7.50 percent year-on-year (y/y) in January 2015 on the back of cheaper domestic fuel prices (triggered by sliding global oil prices). The month-on-month pace (m/m) in the first month of 2015 may have tumbled to near zero percent from 2.46 percent (m/m) in December 2014. Last year, Indonesian inflation had accelerated to 8.36 percent (y/y) primarily due to the implementation of higher prices for government administered low-octane gasoline and diesel in November 2014.

Lanjut baca ›

The Indonesian government, central bank (Bank Indonesia) and Commission XI of the House of Representatives (DPR) agreed to revise several macroeconomic targets in the Revised 2015 State Budget (APBN-P 2015). The revisions include the country’s economic growth (GDP) pace, the average rupiah exchange rate, and inflation target. In essence, the revisions indicate that Indonesian authorities have become less optimistic about the Indonesian economy in 2015 amid external pressures.

Lanjut baca ›

Domestic car sales in Indonesia were slightly down in 2014 compared to the previous year. Amid the slowing economy (Indonesia’s GDP growth may have fallen from 5.8 percent in 2013 to 5.1 percent in 2014) and political uncertainty (triggered by the fragmented results of the country’s legislative and presidential elections) car sales totaled 1.21 million units in 2014, down 1.8 percent from 1.23 million sold vehicles in 2013, according to the latest data from the Indonesian Automotive Industry Association (Gaikindo).

Lanjut baca ›

The central bank of Indonesia (Bank Indonesia) decided to keep its benchmark interest rate (BI rate) at 7.75 percent at its Board of Governors’ Meeting on Thursday (15/01). The country’s Lending Facility and Deposit Facility were maintained at 8.00 percent and 5.75 percent, respectively. According to the bank this interest rate environment is sufficient to push inflation, which has accelerated to 8.36 percent year-on-year (y/y) in December due to fuel subsidy reforms, back towards its target of 3 to 5 percent (y/y) in 2015.

Lanjut baca ›

Despite pressures on the rupiah exchange rate amid a bullish US dollar ahead of monetary tightening in the USA, the Deutsche Bank, one of the world's leading financial service providers, holds a positive view on Indonesian bonds due to Indonesia’s recent fuel subsidy reforms and solid macroeconomic fundamentals. According to the German lender, Indonesian bond yields seem to have decoupled from the currency’s recent depreciating trend although “continued foreign exchange stress could eventually lead to capitulation from bond investors.

Lanjut baca ›

Indonesia’s Chief Economics Minister Sofyan Djalil said that Indonesia will further reduce prices of low-octane gasoline and subsidized diesel at the end of this month as global oil prices continue to fall (touching five-year lows). On 1 January 2015, the Indonesian government had already removed subsidy for widely-used low-octane gasoline (premium), while a fixed subsidy scheme was introduced for diesel (solar) meaning that the government now provides a subsidy of IDR 1,000 (USD $0.08) per liter of diesel.

Lanjut baca ›

Indonesia’s rupiah exchange rate continued to depreciate on Wednesday (07/01). Based on the Bloomberg Dollar Index, the currency had depreciated 0.66 percent to IDR 12,731 per US dollar by 15:50 pm local Jakarta time amid prolonged weak global sentiments. Falling oil prices signal sluggish global economic growth - with the exception of the US economy which is showing structural recovery and thus fuels expectation of higher US interest rates - and speculation that Greece may exit the Eurozone.

Lanjut baca ›

Relative and absolute poverty in Indonesia have declined according to the latest data from Statistics Indonesia (BPS) released on Friday (02/01). In September 2014, there were a total of 27.73 million Indonesians categorized as poor, or 10.96 percent of the total population. Both figures were down from 28.6 million people, or 11.46 percent in September last year (BPS releases data on Indonesian poverty twice per year covering the state of poverty in the months of March and September).

Lanjut baca ›

On 28 December 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic matters such as rupiah exchange rate performance, a geothermal energy update, forecasts for Indonesia’s November trade balance and December inflation, as well as the breaking news story about the missing AirAsia airplane.

Lanjut baca ›

The trade balance of Indonesia is expected to show another deficit in November 2014 as oil and gas imports in combination with weak commodity exports continue to plague the balance. However, Executive Director at the Economic and Monetary Policy Department of Indonesia’s central bank (Bank Indonesia) Juda Agung said that the deficit will most likely turn into a surplus soon. Still, another monthly trade deficit implies that the country’s wide current account deficit has few chances to improve markedly at the year-end.

Lanjut baca ›

As expected, Bank Indonesia cut the benchmark interest rate at its monetary policy meeting on 17-18 September 2024. The BI rate was cut by 25 basis points (bps) to 6.00 percent, while also lowering the deposit facility and lending facility rates by 25 bps to 5.25 percent and 6.75 percent, respectively.

Lanjut baca ›

It is very interesting to take a quick look at the conclusions drawn at the latest US Federal Reserve meeting (held on 30-31 July 2024), as these conclusions have a big impact on global financial markets, including the Indonesian rupiah rate (and even on monetary policy of Indonesia’s central bank, Bank Indonesia).

Lanjut baca ›

Remarkably, the consumer price index of Indonesia showed deflation for the third consecutive month. Based on the latest data from the Statistical Office of Indonesia (Badan Pusat Statistik, or BPS), deflation was recorded at 0.18 percent month-on-month (m/m) in July 2024.

Lanjut baca ›

Inflation in Indonesia was lower than expected in May 2024. In fact, the latest data from Indonesia’s Statistical Office (Badan Pusat Statistik, or BPS) show a contraction in overall prices (in other words: deflation). With an annual headline inflation rate of 2.84 percent, it means price pressures remain under control in Indonesia.

Lanjut baca ›

While we saw the highest monthly inflation rate (of the year) in December 2023, it was lower than we had projected. The latest data published by Indonesia’s Statistical Office (Badan Pusat Statistik, BPS) show that headline inflation reached 0.41 percent month-on-month (m/m) in December 2023.

Lanjut baca ›

As expected, the central bank of Indonesia (Bank Indonesia) decided to impose a 50 basis points (bps) interest rate hike after concluding its two-day monetary policy meeting on 16-17 November 2022.

Lanjut baca ›

For me, G20 summits were always interesting occasions as the leaders of the world’s strongest economies gather to discuss plans to move forward. This year, however, it was the first time that I was quite reluctant to follow the summit (despite the 2022 edition being organized on the Indonesian island of Bali).

Lanjut baca ›

As usual, we devote our first article to the Indonesian economy. But before we zoom in on the latest macroeconomic data of Indonesia, we first provide some context by discussing the global economy.

Lanjut baca ›

Before turning our attention to the economy of Indonesia, it is important to take a closer look at the global economy first. Fortunately, the Organization for Economic Cooperation and Development (OECD) just released a new update (called the OECD Economic Outlook, Interim Report September 2022) and so it’s certainly worthwhile to take a look at its conclusions.

Lanjut baca ›

In the second half of September 2022 the Indonesian rupiah experienced some steep depreciating pressures, nearly touching IDR 15,300 per US dollar. It prompted Bank Indonesia to step and intervene in markets to limit the currency’s decline; a step that typically leads to a drop in the country’s foreign exchange reserves.

Lanjut baca ›