Below is a list with tagged columns and company profiles.

Latest Reports Inflation

  • Indonesian Government: Inflation Rises in 2013, but Eases in 2014

    The government of Indonesia expects inflation to rise to 7.2 percent in 2013 because of the increase in the price of subsidized fuel in June, and expects it to ease to 4 percent in both 2014 and 2015 provided that good monetary policy is implemented. This good monetary policy should particularly be targeted at maintaining food security. The projections were presented by the Fiscal Policy Agency (Badan Kebijakan Fiskal), the Ministry of Finance, and Indonesia's central bank Bank Indonesia.

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  • Bank Indonesia Revises Down GDP Growth, Interest Rate Kept at 5.75%

    The central bank of Indonesia (Bank Indonesia, or BI) kept its benchmark interest rate at 5.75 percent and its overnight deposit facility rate (FASBI) at four percent as the country's core inflation figure is still within the target range of the central bank (3.5-5.5 percent). Core inflation currently stands at 4.12 percent (YoY). However, as the price of subsidized fuel is expected to rise in June, inflation may increase and could trigger a policy response by Bank Indonesia later this year.

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  • Bank Indonesia's Benchmark Interest Rate and New Finance Minister

    Analysts expect that Indonesia's central bank (Bank Indonesia) will maintain its benchmark interest rate at 5.75 percent in tomorrow's meeting (14/05/13). This rate, a historic low rate for Indonesia, has been in force since February 2012. The central bank's deposit facility (Fasbi) is also expected to be kept at 4 percent. The position of Governor of Bank Indonesia - currently held by Darmin Nasution - will be taken over at the end of this month by Agus Martowardojo.

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  • Asia Development Bank (ADB) Also Warns for Asset Bubble in Asia

    Similar to the International Monetary Fund (IMF), the Asia Development Bank has warned that Asia can become hit by an asset bubble as central banks are loosening monetary policy. Besides Japan's program to inject USD $1.4 trillion into the domestic economy, America's Federal Reserve and United Kingdom's Bank of England will increase their money supplies to spur economic growth. These measures can result in economic overheating as well as asset bubbles across the Asian region.

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  • Indonesia Experiences Deflation of 0.10 Percent in April

    In April 2013, Indonesia's inflation rate eased 0.10 percent month-on-month, or 5.57 percent year-on-year. According to Statistics Indonesia (Badan Pusat Statistik, abbreviated BPS) April's deflation was triggered by easing food and clothes prices. Food items that became cheaper last month included garlic, chili, and chicken meat. Particularly rice contributed to the country's deflation as the harvesting season in Indonesia has set in. Core inflation is 4.12 percent (YoY).

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  • Indonesia's P/E Ratio Relatively Low Compared to Regional Economies

    Indonesian newspaper Investor Daily reported that stocks at the Indonesia Stock Exchange are still relatively cheap compared to regional stock indices. Currently, the price to earnings ratio (P/E ratio) of Indonesia's main index is about 18. In contrast, South Korea's Kospi index amounts to 34, Japan's Nikkei 28, Taiwan's Taiex 23, and Philippines' PSE stands at 23 times earnings. As the Indonesian economy as well as its companies' profit figures are projected to grow, the P/E is expected to fall to 16 this year.

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  • Indonesia's March 2013 Inflation Rate Rises Mainly Due to Increased Food Prices

    Today, Statistics Indonesia (Badan Pusat Statistik, abbreviated BPS) released Indonesia's inflation figures for the month March 2013. According to Suryamin, head of BPS, the country's inflation last month reached the level of 0.63 percent, the highest March inflation level in five years. Particularly food prices drove the inflation rate upwards. Year-on-year inflation now stands at 5.90 percent, while year-to-date inflation (January-March) is 2.41 percent.

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  • Indonesia's Central Bank Expects National Economy to Grow by 6.3-6.8 Percent

    Indonesia's central bank (Bank Indonesia) expects the Indonesian economy to grow between 6.3 and 6.8 percent in 2013, supported by strong domestic consumption and foreign investment, with inflation rising by about 4.5 percent. Indonesian exports are expected to increase due to better global demand for Indonesia's commodities such as coal and palm oil, with commodity prices rising accordingly. But some problems in Indonesia's financial system remain to be solved.

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  • Indonesian Government Will Continue to Increase the Electricity Rate This Year

    The Ministry of Energy and Resources stated that the Indonesian government will go ahead with the increase in electricity rates this year. Up to the end of this year, electricity rates will increase every quarter by about four percent to reach a total increase of 15 percent. In early January, the first rate increase was introduced by raising the tariff of electricity sold by state-owned Perusahaan Listrik Negara (PLN), the sole electricity provider in Indonesia. 

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  • Indonesia's Trade Deficit Narrowed in January but Remains under Pressure

    Indonesia's trade deficit narrowed slightly in January as there has been better demand from developed countries. However, Indonesian exports remain under pressure with persistent weak global demand. Moreover, higher crude oil prices increase the country's import costs. In addition to Indonesia's trade deficit, annual inflation increased to 5.31 percent in February due to rising food prices and higher electricity tariffs.

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Latest Columns Inflation

  • Indonesian Rupiah Exchange Rate's New Equilibrium at IDR 11,000?

    Coordinating Minister for Economic Affairs Hatta Rajasa said that the rupiah exchange rate's new equilibrium is at IDR 11,000 per US dollar. As the economic fundamentals of Indonesia's economy have improved in recent months - evidenced by the easing current account deficit and inflation - the rupiah has shown a strong performance, appreciating around six percent against the US dollar in 2014 (year to date). In fact, Rajasa warned that the rupiah should not strengthen too much as this impacts negatively on Indonesia's trade balance.

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  • ICRA Indonesia’s Economic Review; an Update on the Macroeconomy

    ICRA Indonesia, an independent credit rating agency and subsidiary of ICRA Ltd. (associate of Moody's Investors Service), publishes a monthly newsletter which provides an update on the financial and economic developments in Indonesia of the last month. In the February 2014 edition, a number of important topics that are monitored include Indonesia's inflation rate, the trade balance, the current account deficit, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt of the newsletter:

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  • Bank Indonesia's Analysis of February Inflation and January Trade Deficit

    The rate of Indonesian inflation eased in February 2014. Inflation decelerated in February 2014 to 0.26 percent (month-to-month) or 7.75 percent (year-on-year), down from the previous month at 1.07 percent (mtm) or 8.22 percent (yoy) respectively. The drop in the inflation rate is attributable to central and local government policy taken to minimize the second-round effects of recent natural disasters, thereby bringing the inflation of volatile foods in the reporting month to just 0.32 percent (mtm) or 9.85 percent (yoy).

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  • Optimism about the Performance of the Indonesian Rupiah Rate in 2014

    The central bank of Indonesia (Bank Indonesia) is optimistic that the country's currency will continue to appreciate against the US dollar in the first quarter of 2014. Executive Director at the Economic and Monetary Policy Department of Bank Indonesia Juda Agung said that there are two factors that impact positively on the performance of the Indonesian rupiah exchange rate: the improved global economy and strengthening domestic economic fundamentals. However, Agung declined to estimate the value of the rupiah by the end of Q1-2014.

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  • Poverty Eradication and Unemployment Reduction Below Target in Indonesia

    After Indonesia's outlook for economic growth in 2014 was revised down from 6 percent to between 5.8 and 6 percent, the government also revised targets of poverty and unemployment reduction. In the 2014 State Budget (APBN 2014), the government set the targeted poverty rate at 9.0 to 10.5 percent of Indonesia's total population. However, the government revised down this poverty rate to between 10.54 and 10.75 percent, which is also far below the target that was set in the National Medium Term Development Plan (RPJMN) at 8 to 10 percent.

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  • Foreign Inflows in Indonesia's Capital Markets Continue in February 2014

    Foreign confidence in Indonesia's capital markets seems to be growing further after foreign investors continued to expand their stock portfolios last week. In February 2014 (up to Friday 21/02), foreigners purchased IDR 36.0 trillion (USD $3.1 billion) worth of stocks and sold IDR 29.3 trillion (USD $2.5 billion), resulting in net foreign buying of 6.7 trillion (USD $570.2 million) in the first three weeks of February 2014. When foreign net buying of January 2014 is added, total net foreign buying reached IDR 9.0 trillion (USD $766.0 million).

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  • Macroeconomic Assumptions in Indonesia's State Budget Revised Down

    Only 50 days since the start of the fiscal year 2014 have passed and the government has already shown that it is not convinced to meet targets of basic macroeconomic assumptions set in the 2014 State Budget (APBN 2014). Therefore, the Indonesian government has lowered the outlook for all basic macroeconomic assumptions in the 2014 State Budget. On Thursday 19 February 2014, the government formally presented the downward revision of economic targets in the State Budget to the House of Representitative's Budget Agency.

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  • What about Indonesia's Domestic Consumption in 2014?

    Recently, Statistics Indonesia (BPS) released various data in the context of Indonesia's gross domestic product (GDP). Economic expansion of Southeast Asia's largest economy slowed to 5.78 percent (year-on-year) in 2013. Household consumption accounted for the largest share of Indonesia's GDP (55.8 percent) and continued to grow significantly (5.28 percent yoy) in 2013. This consumer force is one of the main reasons why many foreign companies enter and expand their businesses in Indonesia.

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  • Official Press Release of Bank Indonesia: BI Rate Kept at 7.50%

    At Bank Indonesia's Board of Governors’ Meeting today (13/02), it was decided to maintain the country's benchmark interest rate (BI rate) at 7.50 percent as well as the interest rates on the Lending Facility and Deposit Facility at 7.50 percent and 5.75 percent respectively. The policy is consistent with the tight monetary policy stance currently adopted in order to steer inflation back towards its target corridor of 4.5±1 percent in 2014 and 4±1 percent in 2015, as well as to reduce the current account deficit to a more sustainable level.

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  • Motorcycle Sales in Indonesia Fall 11% in January 2014 due to Floods

    Domestic sales of motorcycles in Indonesia fell 11 percent to 580,288 units in January 2014. The main reason for this decline in the first month of the year were severe floods brought about by high rainfall amid a peak of the rainy season. These weather conditions disrupted the distribution of motorcycles from factories to dealers. As a result, all motorcycle brands recorded lower sales figures according to data released by the Indonesian Motorcycle Industry Association (Aisi). However, more factors were at play.

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