On 11 May 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 topics such as the revision of the Negative Investment List, an analysis of GDP growth in Q1-2014, the benchmark interest rate, the current account deficit, manufacturing, unemployment , the offical result of the legislative election, and more.

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The central bank of Indonesia (Bank Indonesia) released its '2013 Economic Report on Indonesia' earlier this week. This report discusses in great detail both global and domestic economic dynamics as well as policy responses. The year 2013 was a year full of challenges for the Indonesian economy because of changes in global economic conditions (US Federal Reserve tapering), requiring a range of structural policy changes to steer the economy of Indonesia towards a more balanced growth and restored macroeconomic stability.

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On 13 April 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. Due to the legislative election on Wednesday (09/04), this newsletter has a main focus on politics. Other topics include the benchmark interest rate, gross domestic product (GDP) growth, car & motorcycle sales, a profile of Astra International, and more.

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Indonesia's e-commerce industry (online shopping) is expected to continue its rapid growth in the years ahead as more and more Indonesians have access to Internet amid the country's rising per capita GDP (resulting in a rapidly expanding middle class). Indonesians' purchasing power has expanded quickly and in combination with the popularity of the smartphone, people are increasingly purchasing consumer goods online. This was one of the conclusions drawn in an online business insight discussion organized by Google and Blibli.com in Jakarta.

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Singapore-based DBS Bank predicts that household consumption in Indonesia will grow 5.6 percent (yoy) in the first semester of 2014, which is slightly higher than the growth recorded in the last three years. Gundy Cahyadi, economist at the DBS Bank, said that the main reason for this accelerated household consumption is the legislative election that will be held on 9 April 2014. Traditionally, consumption peaks in times of elections. Household consumption is one of the main pillars of Indonesia's economic growth, accounting for 55 percent of GDP.

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Agus Martowardojo, Governor of the central bank of Indonesia (Bank Indonesia) expects a trade surplus of around USD $700 million in February 2014. If Martowardojo's forecast is realized, it would be a sharp contrast to the USD $430.6 million trade deficit that was recorded one month earlier. In January, the trade deficit was mainly due to declining exports of coal and vegetable oil (which together account for 26.7 percent of total non-oil & gas exports), among others, due to ongoing annual contractual negotiations at the year-start.

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Contrary to the World Bank and Bank Indonesia that both revised down forecasts for economic growth of Indonesia in 2014, the government of Indonesia is still convinced that it can meet the target of 5.8 to 6.0 percent as has been set in the 2014 State Budget (APBN 2014). In its most recent Indonesia Economic Quarterly report, the World Bank said it expects Indonesia’s economic growth to reach 5.3 percent in 2014, while Bank Indonesia targets a 5.7 percentage growth rate.

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Car sales in Indonesia grew 8.2 percent (year-on-year) to 111,767 vehicles in February 2014 according to the latest data from the Association of Indonesian Automotive Manufacturers (Gaikindo). As usual, car sales were dominated by Toyota, Daihatsu (both are distributed by Astra International, one of Indonesia's largest diversified conglomerates), Mitsubishi, Suzuki and Honda. February sales were supported by the popular low-cost green car (LCGC) that was introduced on Indonesia's market in 2013.

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The central bank of Indonesia (Bank Indonesia) lowered its forecast for growth of Southeast Asia's largest economy in 2014 from the range of 5.8 - 6.2 percent to 5.5 - 5.9 percent as expansion of domestic consumption and exports are less robust than previously estimated. As such, Bank Indonesia implied that economic expansion of Indonesia will slow down further. Starting from 2011, gross domestic product (GDP) growth of Indonesia has declined steadily from 6.5 percent to 5.8 percent in 2013.

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On 2 March 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 the G20 meeting in Sydney, foreign investment, Inflation, rupiah exchange rate performance, economic growth, ANTV's IPO, natural disasters, the presidential election, and more.

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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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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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Indonesia's cement sales in January 2014 declined 1 percent to 4.65 million metric tons from the same month in 2013 (4.68 million metric tons). The decline was caused by severe floods brought about by high rainfall amid a peak in Indonesia's rainy season. The floods resulted in disrupted distribution networks, therefore blocking cement shipments to retailers. Moreover, these weather conditions caused the postponement of several construction activities, thus reducing demand for cement.

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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 January 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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On Wednesday (05/02), Statistics Indonesia (BPS) reported that the economy of Indonesia expanded 5.78 percent in 2013. This result implies that in 2013 Indonesia experienced the slowest pace of GDP growth since its 4.63 percentage growth in 2009. However, this slowing growth was basically self-inflicted as both the Indonesian government and central bank (Bank Indonesia) used various monetary and fiscal policies to curb economic expansion in order to tackle several financial issues.

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On Wednesday (05/02), several factors caused a rebound of Indonesia's benchmark stock index (Jakarta Composite Index/IHSG). The IHSG climbed 0.74 percent to 4,384.31 points, thus closing the gap on 4,367-4,377. These factors were strengthening indices on Wall Street after US factory orders did not decline as much as was anticipated by the market, as well as today's release of Indonesia's 5.78 percent GDP growth figure (which was slightly higher than forecasted) and which led to an appreciating rupiah exchange rate.

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The government of Indonesia - through its Ministry of National Development Planning (known as Bappenas) - designed three funding scenarios for Indonesia's infrastructure development in the National Medium-Term Development Plan (RPJMN 2015-2019). The lack of appropriate infrastructure is one of the bottlenecks to Indonesia's development. The scenarios involve the amount of funds and other requirements for infrastructure investment. The three scenarios are divided into a 'full scenario', a 'partial scenario' and a 'baseline scenario'.

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This year, legislative and presidential elections will be held in Indonesia. Obviously, there is a strong relationship between the politics and economics of a country. Businessmen from various sectors of Indonesia's economy have already been voicing their views. As the umbrella organization of the Indonesian business chambers and associations, Kadin Indonesia recently shared its views about the elections as well. The institute believes that the 2014 elections will run smoothly because Indonesia's democracy has matured.

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On Wednesday 5 February 2014, Statistics Indonesia (BPS, a non-departmental government institute) is expected to release Indonesia's official GDP growth figure for the year 2013. It is estimated that the outcome will be the lowest GDP growth figure since 2009 when Southeast Asia's largest economy grew 4.6 percent after feeling the impact of the global financial crisis. In 2013, again, Indonesia felt the negative influence of external troubles. And in combination with domestic factors, Indonesia's economic growth is expected to be around 5.7 percent in 2013.

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The Jakarta Globe reported that Schroders Indonesia will increase its Indonesian assets by 5 to 10 percent in 2014 as the company expects the country's benchmark stock index (IHSG) to rise amid the legislative and presidential elections that are scheduled for April and July 2014. Schroders is optimistic that growth in Southeast Asia's largest economy will accelerate after the hiccup in 2013 when large capital outflows emerged amid international and domestic troubles. Indonesia's GDP growth is estimated to have slowed to 5.7 percent in 2013.

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