Indonesia October Inflation, Manufacturing PMI & Tourism Update

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 Indonesia

To 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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