MACROECONOMIC ANALYSIS SERIES: Indonesia Economic Outlook, Q2-2020

  • The case of Covid-19 pandemic in Indonesia has increased dramatically, reaching more than 2,400 recorded cases with an increasingly widespread distribution. The presence of this pandemic certainly poses a major risk, both to the society and the Indonesian economy. The economic slowdown in both real and financial sectors is inevitable. Amid the risk of significant disruption in domestic economic activity, the government requires strategic, massive and welltargeted fiscal policies to be executed swiftly. So far, the stimulus has been issued by the government aiming at two focuses. For the short-term focus, the government has increased the healthcare budget and accelerated the realization of the social assistance program. Compared to other affected countries, the amount of the health sector budget in Indonesia is relatively higher, around 0.5% of GDP. For the long-term focus, the government has prepared a strategy to recover economic activity through several initiatives, such as tax incentives and credit relaxation. So far, the total amount of fiscal stimulus packages has amounted to 2.5% of GDP.…
    07 Apr
    07 Apr
  • Inflasi umum (YoY) pada bulan Maret mengalami perlambatan dibandingkan pada bulan sebelumnya, yaitu sebesar 2,96%. Hal ini sesuai dengan prediksi dimana inflasi umum (MtM) juga rendah sebesar 0,10%. Perlambatan inflasi pada bulan ini disebabkan oleh penurunan laju inflasi pada kategori barang diatur pemerintah dan bergejolak. Lesunya inflasi pada kedua kategori barang ini erat kaitannya dengan turunnya harga minyak dunia (WTI AS), yang pada akhir Maret hanya mencapai $19.85 per barel – hampir merupakan titik terendah dalam 18 tahun.  Penopang utama laju inflasi pada bulan Maret adalah kategori barang inti (sebesar 2,87% dan 0,28% secara YoY dan MtM). Dalam pandangan kami, kenaikan laju inflasi inti tersebut dipicu oleh pembelian massal berbagai barang-barang kebutuhan dasar rumah tangga – sebagai respons terhadap merebaknya virus COVID-19.…
    03 Apr
    03 Apr
  • Two times emergency rate cuts by the Fed in the last two weeks due to rapidly escalating Covid-19 pandemic have led the market into a large sell-off in risky assets. Fear of uncertainties among global investors triggered capital outflows from emerging economies. Indonesia’s portfolio has recorded an outflow of USD8.1 billion since the spread of the Covid-19 appeared in late January. To anticipate the economic disruption due to the outbreak in the short to medium term, central banks have put the efforts to maintain liquidity in their banking system along with cutting their policy rates. Bank Indonesia has also introduced stimulus packages, including providing some injections on forex and DNDF markets as well as lower bank’s FX reserve requirements. However, the flight to safety moves has weakened Rupiah to around IDR15,200 so far. The effect on the FX stability has also shown up in the depreciation of all emerging economies’ currency as the market’s extreme risk aversion has led into forex shortage, especially USD, across the world. The condition has been clearly dictating financial market’s trajectory into a bleak area.…
    19 Mar
    19 Mar
  • Meskipun inflasi (MtM) sesuai dengan ekspektasi yang lebih rendah dari inflasi bulan Januari sebesar 0,14%, inflasi umum (YoY) mengalami peningkatan sebesar 30 bps menjadi 2,98% dibandingkan bulan sebelumnya yang hanya mencapai 2,68%. Peningkatan laju inflasi umum secara  YoY ini disebabkan lebih tingginya inflasi MtM yang biasanya mengalami deflasi pada bulan Februari. Dengan kata lain, terjadi shock yang lebih besar terhadap pergerakan harga, terutama harga barang bergejolak. Gangguan yang lebih besar ini salah satunya adalah intensitas musim hujan  yang lebih tinggi menyebabkan hambatan pada tingkat suplai beberapa komoditas pangan seperti komoditas bawang putih, bawang merah, dan juga cabai merah.…
    04 Mar
    04 Mar
  • The recent epidemic of Coronavirus has a ripple effect that might disrupt the global growth recovery, including Indonesia. The outbreak could potentially bring some indirect impacts on Indonesia economy through three channels: financial market, real sector, and the government sector. Headwinds from the outbreak has shocked the financial market due to fears by global investors which trigger capital outflows from emerging economies in the short run, threatening the market liquidity and FX stability. In the real sector, the impacts of the outbreak could take place in terms of the decrease in tourism & trade activities and a potential delay in real investment. In the government sector, lower tax revenue and higher government bonds yield could be expected.…
    20 Feb
    20 Feb
  • Inflasi umum pada bulan Januari (secara YoY) mengalami peningkatan sebesar 0.08 bps dari bulan sebelumnya yang hanya mencapai 2.59%. Peningkatan laju inflasi ini disebabkan oleh beberapa hal. Pertama, terdapat pengaruh dari faktor musiman dari sisi penawaran dimana harga beberapa komoditas pangan seperti cabai, bawang merah, bawang putih cenderung mengalami kenaikan. Faktor kedua adalah pengenaan cukai terhadap rokok dan peningkatan tarif BPJS yang berlaku pada awal bulan Januari. Faktor musiman akan terus berlanjut sampai bulan Maret, sedangkan dampak pengenaan cukai dan kenaikan tarif BPJS akan bersifat temporer. Daya beli masyarakat bersifat relatif stabil – tercermin dari pergerakan inflasi inti yang bersifat stagnan sepanjang waktu. Karena itu, kami mempertahankan prediksi inflasi kami sebelumnya, yaitu di kisaran 2,80 – 3,00% hingga akhir tahun nanti.…
    12 Feb
    12 Feb
  • The economy continues to grow more slowly from 5.07% (y.o.y) in Q2-2019 to 5.02% (y.o.y) in Q3-2019. It is likely to be followed by similar performance in Q4-2019. Despite the ongoing global economic slowdown, manufacturing sector rebounds in Q3-2019 (4.15%) after two consecutive slower growth in 1H-2019. It could be a promising sign of further acceleration in 2020. On the other hand, consumption has declined as a consequence of rather weak spending due to rising global uncertainty.…
    04 Feb
    04 Feb
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