Recent Economic Developments August 2011 Published by Investors - - PowerPoint PPT Presentation
REPUBLIC OF INDONESIA Recent Economic Developments August 2011 Published by Investors Relations Unit Republic of Indonesia Address Bank Indonesia International Directorate Investor Relations Unit Sjafruddin Prawiranegara Building, 5 th
Published by Investors Relations Unit – Republic of Indonesia Address Bank Indonesia International Directorate Investor Relations Unit Sjafruddin Prawiranegara Building, 5th floor Jalan M.H. Thamrin 2 Jakarta, 10110 Indonesia Tel +6221 381 8316 +6221 381 8319 +6221 381 8298 Facsimile +6221 350 1950 E-mail contactIRU-DL@bi.go.id
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GDP Growth Inflation Balance of Payments Foreign Exchange Reserves
Billion USD
* Bank Indonesia projection
2009 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%
2005 2006 2008 2008 2009 2010 Q1 2011 Q2 2011 Q3* 2011
0.00 5.00 10.00 15.00 20.00 Jan Mar May Jul Sep Nov Jan Mar May Juli Sep Nov Jan Mar May July 2009 2010 2011 %
CPI (%, yoy) Core (%, yoy) Volatile Food (%, yoy) Administered (%, yoy)
4.00 6.00 8.00 10.00 12.00
40.00 60.00 80.00 100.00 120.00 140.00 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May June Jul 2010 2011 foreign exchange reserves (LHS) month of import & government debt service (RHS)
20 40 60 80 100 120
5 10 15
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2** 2007 2008 2009 2010* 2011
Current Acc.
Reserve Assets (RHS)
M
Billion USD BillionUSD
6
consumption, and investment. Investment performance also expected to grow faster driven by higher demand and the realization of Government’s capital expenditure. In the 2nd quarter of 2011, the economy charted 6.5% (yoy) growth, in line with the projection , and is forecasted even stronger in Q3/2011 and trough out 2011 to reach 6.6%. The continuing strong economic activities confirm the outlook of economic growth to potentially reach the upper bound of 6.3-6.8% in 2011 and 6.4-6.9% in 2012.
inflation in July 2011 came to 0.67% (mtm) or 4.61% (yoy). Core inflation reached 0.42% (mtm) or 4.55% (yoy) driven by the increase in global commodity prices and the increase in domestic demand. Looking forward, the increasing inflation is forecasted to grow from household consumption during Ramadhan and Eid holidays. However, Government policies on securing supply of foods is predicted to mitigate volatility
preceding period. Spurring this increase was a sharp rise in the capital and financial account surplus that outweighed a decrease in the current account surplus. In response, international reserves at the end of June 2011 boosted to US$119.7 billion, equivalent to 6.8 months of imports and servicing of official external debt. Furthermore, the international reserves at the end of July 2011 reached USD 122.7 billion, or equivalent to 7 months of imports and external debt services of the Government
investment realization in the 2nd quarter of 2011 is Rp. 62.0 trillion (around USD7.2 billion) with 85% of investments directed outside of the island of Java. The realization figures until the 1st semester of 2011 came to Rp.115.6 trillion or 48.2% from the target and an increase of 24.4% compared to the realization at the same period in 2010.
aiming on continue declining debt-to-GDP ratio, diversifying government debt profile, and reducing funding reliance on international capital market.
6.75%. Bank Indonesia is confident that the impact of the recent turmoil in the global financial markets due to the downgrade of US credit rating to the domestic financial market is limited, and can be contained with continuous monitoring of market development and coordination with the Government. Bank Indonesia is strongly confident that the implementation of monetary and macroprudential policy mix can secure macroeconomic stability and keep inflation within the targets, that is, 5% +1% in 2011 and 4.5% +1% in 2012.
Resilient economy, which impressively navigates through the global crisis and continued confidence in economic
S&P (April 8, 2011): upgraded Indonesia’s long-term foreign currency rating to BB+ from BB with positive outlook. With the rating upgrade, puts Indonesia 1 notch closer to investment grade by the three major rating agencies. The positive outlook also indicates the possibility of Indonesia to have another upgrade in the near future. The main factor supporting this decision is continuing improvements in the government's balance sheet and external liquidity, against a backdrop of a resilient economic performance and cautious fiscal management. Fitch Ratings (February 24, 2011): affirmed Indonesia’s long-term foreign and local currency issuer default ratings (IDRs) at ‘BB+’ and revised the outlooks on both to Positive from Stable. Fitch stated key factors supporting this action were strong economic growth, well above of the ‘BB’ and ‘BBB’ range medians. Encouragingly, Indonesia’s growth has not been accompanied by the emergence of potentially-risky external imbalances – rising savings rates have largely matched the growing investment, and especially the performance of Indonesia's balance of payments. Modest current account surplus is always maintained since 1998. The strengthening of foreign exchange reserves reached USD96.2 billion, equivalent to 7 months of imports and debt payments become critical factors that support the credit profile of Indonesia. Moody’s Investors Service (January 17, 2011): upgraded Republic of Indonesia’s foreign and local-currency bond ratings to Ba1 with stable outlook. This follows Moody’s release last December which placed the ratings on a review for possible upgrade. The key factors supporting this action were (1) economic resilience which accompanied by sustained macroeconomic balance; (2) Improved government’s debt position and central bank’s foreign currency reserve adequacy; and (3) Improved prospects for foreign direct investment inflows which expected to fortify Indonesia’s external position and economic outlook. Japan Credit Rating Agency, Ltd (July 13, 2010): upgraded Indonesia's sovereign rating to Investment Grade from BB+ to BBB- with stable outlook. The first upgrade to reach investment grade in the last 13 years reflects enhanced political and social stability, sustainable economic growth , alleviated public debt burden as a result of prudent fiscal management, reinforced resilience to external shocks stemming from the foreign reserves accumulation and an improved capacity for external debt management and efforts made by the current administration to outline the framework to deal with structural issues such as infrastructure development.
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Solid economic fundamentals supported the improvement of Indonesia’s sovereign credit rating since 2001
World Economic Forum – The Global Competitiveness Report 2010 – 2011 (September 15, 2010) reported that Indonesia posts an impressive gain of 10 places, mainly driven by a healthier macroeconomic environment and improved education indictors. Indonesia considered to successfully maintain a relatively healthy macroeconomic environment throughout the crisis. While most other countries saw their budget deficits surge, Indonesia kept its deficit under control” The IMD Competitive Center (May 19, 2010) reports a major improvement in Indonesia's global competitiveness, with Indonesia moving up from 42nd to 35nd place among a total of 57 major nations surveyed worldwide. For Indonesia, the improvement in 2010 has been achieved through significant gains in economic performance, followed by government efficiency and infrastructure improvement. OECD (March 31, 2011): Indonesia’s Credit Risk Classification (CRC) still category 4. Indonesia is in one peer with Colombia, Egypt, Philippina, Turkey and Uruguay. The last year upgrade was a timely acknowledgement by the developed economies of the consistent economic improvement. And an upgrade in this category would significantly improve Indonesia’s credit standing in front of the creditor countries especially the credit exports creditor countries which eventually would decrease the debt burden.
10
Realized foreign direct investment (USD billion) Realized domestic direct investment (IDR trillion)
Source: BKPM Source: BKPM * US$ / Rp. exchange rate of 8,709, the BI middle exchange rate as of March 31, 2011.
Total investment realization in the second quarter of 2011 was Rp. 62.0 trillion (around USD7.2 billion) with 85% of investments are located
Until the 1st semester of 2011 it reached Rp.115.6 trillion or 48.2% from the target and an increase of 24.4% compared to that during the same period in 2010. Those figures raised the expectation that domestic and foreign direct investment realization target of Rp240 trillion in 2011 can be
fiscal incentives on capital investment will contribute to the realization of this target.
11 6.0 10.3 14.9 10.8 16.2 9.4 2006 2007 2008 2009 2010 Semester 1 2011 20.8 34.9 20.4 37.8 60.6 33.0 2006 2007 2008 2009 2010 Semester 1 2011
Source: BKPM
12 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 2006 2007 2008 2009 2010 Semester 1 2011 2,229 2,526 813 746 704 1,026 747 673 1,612 628 1,183 798 903 955 714 1,293 655 806 756 860 1,064 789 1,428 650 706 785 647 3,305 8,530 4,171 5,046 1,051 653 1,138 882 1,295 2,556 Mining Other primary sector Food industry Paper and printing industry Chemical and pharmaceutical industry Metal machinery and electronic industry Motor vehicle and other transport equipment industries Other secondary sector Electricity, gas and water supply Trade and repair Transportation, storage and communications Other tertiary sector
FDI – By Sector (USD million)
Source: Bank Indonesia.
14 On the growth side, supported with a more balanced growth structure, investment forging ahead and continued solid performancein exports, BI forecast the economy to grow around 6.3%-6.8% in 2011 and further 6.4%-6.9% in 2012. For the 2nd quarter of 2011, the economy, as projected, charted 6.5% (yoy) growth. While in the 3rd quarter of 2011 and trough out 2011 the economy is forecasted even stronger to reach 6.6% on the back of solid investment, export, and consumption. Investment is gaining momentum to grow stronger since to government starts to spend its capital expenditure. From the production side, the growth driver are the manufacturing sector, trade, hotel, and restaurants sector, and transportation and communication sector.
% yoy
Economic Growth Forecast Table 3.1 Forecast of Economic Growth - Demand Side Sector 2009 2010 2011 2011* 2012* I II III* Private Consumption 4,9 4,6 4,5 4,6 4,7 4,4 - 4,9 4,8 - 5,3 Government Consumption 15,7 0,3 3,0 4,5 18,4 8,8 - 9,3 3,9 - 4,4 Gross Fixed Capital Formation 3,3 8,5 7,3 9,2 10,5 9,3 - 9,8 12,3 - 12,8 Exports of Goods and Services
14,9 12,3 17,4 7,9 9,4 - 9,9 9,7 - 10,2 Imports of Goods and Services
17,3 15,6 16,0 10,3 11,1 - 11,6 11,3 - 11,8 GDP 4,6 6,1 6,5 6,5 6,6 6,3 - 6,8 6,4 - 6,9 * Bank Indonesia Projection Economic Growth Forecast Table 3.2 Forecast of Economic Growth - Supply Side S e c t o r 2009 2010 2011 2011* 2012* I II III* Agriculture 4,0 2,9 3,4 3,5 3,5 3,1 - 3,6 3,5 - 4,0 Mining and Quarrying 4,4 3,5 4,6 4,1 4,1 3,7 - 4,2 3,7 - 4,2 Manufacturing 2,2 4,5 5,0 5,1 5,1 4,8 - 5,3 5,0 - 5,5 Electricity, Gas, and Water Supply 14,3 5,3 4,2 5,3 5,9 5,1 - 5,6 6,4 - 6,9 Construction 7,1 7,0 5,3 6,8 7,2 6,4 - 6,9 7,6 - 8,1 Trade, Hotels, and Restaurants 1,3 8,7 7,9 8,4 8,9 8,5 - 9,0 8,6 - 9,1 Transportation and Communication 15,5 13,5 13,8 13,1 13,2 12,7 - 13,2 11,6 - 12,1 Financial, Rental, and Business Services 5,1 5,7 7,3 6,9 7,0 6,7 - 7,2 6,8 - 7,3 Services 6,4 6,0 7,0 6,7 6,6 6,3 - 6,8 6,1 - 6,6 GDP 4,6 6,1 6,5 6,5 6,6 6,3 - 6,8 6,4 - 6,9 * Bank Indonesia Projection
15 15
Source: Bank Indonesia
another considerable surplus in 2011. The overall balance of payments in Q2/2011 posted a surplus of US$11.9 billion. At the end of July 2011, the international reserves reached USD 122.7 billion, or equivalent to 7 months of imports and external debt services of the Government
M
16
The current account posted a surplus of US$0.2 billion in Q2/2011, buoyed mainly by strong growth in non-oil & gas exports and natural gas
the oil trade balance, services and income accounts. Declining performance in the current account was offset by a significant rise in the capital and financial account surplus to US$12.5 billion almost doubled from those in the previous quarter. A more conducive investment climate, continuing attractive returns on investments in Indonesia, and the need of foreign denominated liquidity in domestic market, while there be sustained excess liquidity in the global financial markets, were among the key factors that supported the robust capital & financial account performance.
Source: Bank Indonesia TOTAL Q1 Q2 Q3 Q4 TOTAL Q1* Q2** I. Current Account 10,628 1,936 1,409 1,205 1,093 5,643 2,089 232
30,932 6,954 6,848 7,593 9,232 30,628 8,686 9,728
119,646 35,088 37,444 39,712 45,830 158,074 45,818 51,460
25,560 5,812 5,881 6,605 9,097 27,395 8,628 10,638
9,388 2,805 3,107 2,980 2,994 11,886 3,495 4,088
4,578 1,080 1,098 1,151 1,301 4,630 1,027 974 II. Capital & Financial Account 4,852 5,590 3,697 7,365 9,550 26,201 6,436 12,518
96 18 2 4 26 50 1
4,756 5,572 3,695 7,361 9,524 26,151 6,435 12,518
2,628 2,484 2,298 1,684 4,241 10,706 3,041 2,699
10,336 6,159 1,089 4,517 1,437 13,202 3,798 5,742
308 1,160 3,846 2,243
4,076 III. Total (I + II) 15,481 7,526 5,106 8,570 10,642 31,844 8,525 12,750 IV. Net Errors & Omissions
315
646
V. Overall Balance (III + IV) 12,506 6,621 5,421 6,955 11,289 30,285 7,666 11,876 Memorandum: Reserve Asset Position 66,105 71,823 76,321 86,551 96,207 96,207 105,709 119,655 In Months of Imports & Official Debt Repayment 6.5 5.2 5.6 6.3 7.0 7.0 6.0 6.8 Current Account (% GDP) 1.95 1.18 0.80 0.65 0.58 0.79 1.06 0.11 Debt Service Ratio (%) 23.2 21.2 23.2 20.3 23.7 22.2 18.0 21.6
7.5 5.0 7.2 4.8 6.2 5.8 4.5 5.4
1) In terms of free on board (fob) 2) Excluding reserves and related items 3) Negative represents surplus and positive represents deficit. * Provisional figures ** Very provisional figures
2009 2010* I T E M S 2011
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A strong performance of non-oil & gas exports that charted 38.6% growth (yoy) supported the non-oil & gas trade balance surplus of US$10.6
and high commodity prices in international market. Meanwhile, solid economic growth during the reporting period triggered the non-oil & gas imports to grow at 28.4% (yoy). Imports of raw materials and capital goods, comprised of 70% and 20% of total imports consecutively, and grew by 31% and 26% respectively.
Source: Bank Indonesia
Billion USD
18
The oil & gas trade balance turned into deficit as oil imports drove up in response to rising consumption of oil-based fuels and falling national oil production amid a hike in international oil price. Meanwhile, further increase in the gas trade balance surplus was constrained by a shifting of gas supply particularly for fulfiling domestic needs.
Source: Bank Indonesia
2 4 6
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2** 2007 2008 2009 2010* 2011
Oil Trade Balance Gas Trade Balance Oil & Gas Trade Balance
Billion USD
19
vacation period (seasonal factors) and increased payments for freight services in line with upbeat import activity.
payments of debt interest.
Source: Bank Indonesia
1 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2** 2007 2008 2009 2010* 2011
Services, Net Current Transfer, Net Income, Net
20
The financial account surplus mounted to US$12.5 billion, almost doubled from a surplus in the previous period. The higher surplus was primarily due to substantial inflows of foreign capital in terms of domestic debt instruments and growing domestic financing needs that prompted the private sector to draw on foreign lines of credits and offshore deposits.
Source: Bank Indonesia
5 10 15
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2** 2007 2008 2009 2010* 2011 Other Investment Portfolio Investment Direct Investment Financial Account
Financial Account (Total) Billion USD
21
The residents’ investment abroad (the financial account - assets) posted a lower net outflows in Q2/2010 (US$1.0 billion), compared to a substantial net outflows of US$3.3 billion in Q1/2010. This was primarily explained by higher withdrawal of resident deposits in overseas banks in
Source: Bank Indonesia
2 4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2** 2007 2008 2009 2010* 2011
Other Investment Portfolio Investment Direct Investment (abroad) Financial Account
22
Inflows of foreign direct investment (FDI) expanded further to prop up a US$5.2 billion net flows of FDI in Q2/2011. A relatively strong investment growth was supported by a more conducive investment climate and favorable macroeconomic conditions contributes significantly to this robust performance.
Source: Bank Indonesia
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2** 2007 2008 2009 2010* 2011
Inflow (Equity & Loan Disb) Outflow (Equity & Debt Repayment) Total
23
Foreign portfolio investment recorded a US$6.3 billion surplus in Q2/2011, higher than US$4.1 billion surplus in the preceding period. The massive inflows were mainly charted in domestic stocks and government bonds, driven by sustained excess liquidity on global financial markets and continuing attractive returns on investments in Indonesia.
Source: Bank Indonesia
2 4 6 8 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2** 2007 2008 2009 2010* 2011
Public Sector Private Sector Liabilities, Total
Billion USD
24
Foreign other investment booked a US$2.0 billion surplus, rose from a US$0.8 billion surplus in Q1/2010. This upturn was mainly caused by larger withdrawal of corporates’ foreign debts to support their business activities and mounting foreign deposits in domestic banks. Meanwhile, the government debts showed a net outflows due to the seasonal factors of debt repayments.
Source: Bank Indonesia
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2** 2007 2008 2009 2010* 2011
The CPI inflation in July 2011 recorded at 0.67% (mtm) or 4.61% (yoy), which is relatively in line with its seasonal pattern. Core inflation reached 0.42% (mtm) or 4.55% (yoy) driven by the increase in global commodity prices and the increase in domestic demand. Looking forward, the increasing inflation is forecasted to grow from household consumption during Ramadhan and Eid holidays. However, Government policies on securing supply of foods is predicted to mitigate volatility of the prices hence inflation will be under control.
Inflation – by component
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Source: Bank Indonesia
0.00 5.00 10.00 15.00 20.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Juli Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun July 2009 2010 2011 %
CPI (%, yoy) Core (%, yoy) Volatile Food (%, yoy) Administered (%, yoy)
BI Rate In the latest Board of Governors’ Meeting convened on August 9, 2011, BI rate decided to be held at 6.75%. Bank Indonesia is confident that the impact of the recent turmoil in the global financial markets due to the downgrade of US credit rating to the domestic financial market is limited, and can be contained with continuous monitoring of market development and coordination with the Government. Bank Indonesia is strongly confident that the implementation of monetary and macroprudential policy mix can secure macroeconomic stability and keep inflation within the targets, that is, 5% +1% in 2011 and 4.5% +1% in 2012.
Source: Bank Indonesia.
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8.25% 6.75% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%
Sep-08 Apr-09 Nov-09 Jun-10 Jan-11 Aug-11
well below the threshold of 2 (1.61 on July 2011).
in the relatively high level of Capital Adequacy Ratio (CAR) of 17% and subdued Non-Performing Loans (NPL) at below 5% (2.7%) as of June 2011.
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Sufficient CAR (%) Sound level of NPLs (%)
Source: Bank Indonesia
19.3 19.1 19.2 17.8 17.4 16.5 16.2 16.4 16.4 16.3 17 17 18 17.6 17.8 17.4 17
14.5 15.0 15.5 16.0 16.5 17.0 17.5 18.0 18.5 19.0 19.5 20.0
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5
Feb-10 Apr-10 Jun-10 Agust-10 Okt-10 Des-10 Feb-11 Apr-11 Jun-11
gross NPL net NPL
June 2011 at 23.6% (yoy) on the strength of expansion in all lending categories including credit to SMEs.
Source: Bank Indonesia
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674 665 677 676 677 683 703 632 633 684 694 726 759 758 813 818 819 853 880 855 857 870 882 906 940 269 274 280 278 281 286 297 289 301 296 307 305 336 339 325 327 332 330 348 342 357 357 365 376 388 391 398 408 411 418 427 436 483 493 475 484 499 489 500 501 513 523 523 537 548 558 568 577 588 603
Working Capital loans Investment Loans Consumption Loans
Banking System Stability remains sound with stable CAR, continuous credit expansion and low NPL (data as of June 2011)
Source: Bank Indonesia
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Indicators Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Total Asset (T Rp) 2.563,7 2576,3 2.604,4 2.678,3 2.683,5 2.700,2 2.758,1 2.796,4 2.856,3 3.008,9 2.990,7 2.993,1 3.065,8 3.069,1 3.136,4 3.195,1 Deposits (T Rp) 1.982,2 1.980,5 2.013,2 2.096,0 2.082,6 2.092,8 2.144,1 2.173,9 2.212,2 2.338,8 2.302,1 2.287,8 2.351,4 2.340,2 2.397,2 2.438,0
471,1 462,1 473,7 522,2 506,9 496,4 504,2 497,8 511,9 535,9 530,6 529,8 540,8 528,3 561,2 577,0
576,2 580,5 588,8 610,8 619,5 633,2 653,6 659,7 674,3 733,2 715,8 713,2 722,7 734,5 740,8 753,7
934,9 937,8 950,7 963,1 956,2 963,2 986,2 1.016,4 1.026,0 1.069,8 1.055,6 1.044,9 1.087,8 1.077,4 1.095,2 1.107,3 Earning Assets (T Rp) 2.416,4 2419,4 2.452,4 2.528,5 2.531,6 2.547,1 2.591,3 2.647,9 2.643,1 2.778,9 2.746,8 2.749,8 2.813,3 2.799,6 2.859,7 2.912,9
1.485,9 1.516,0 1.561,2 1.615,8 1.627,4 1.670,6 1.689,1 1.705,8 1.736,1 1.796,0 1.776,1 1.803,9 1.844,2 1.872,6 1.918,6 1.979,6
221,5 255,4 253,6 224,3 190,5 208,7 176,3 147,3 142,6 139,3 143,5 121,3 139,8 133,6 111,4 115,3
82,5 43,2 47,0 97,0 119,2 66,0 132,2 218,1 178,4 277,8 269,9 257,4 262,5 245,5 284,1 282,6
350,6 331,7 333,3 327,1 325,7 325,1 326,4 320,7 342,9 324,9 323,1 326,5 337,9 331,8 339,5 334,5
264,9 262,7 246,6 252,9 258,3 265,8 256,2 244,7 231,8 228,5 221,6 227,9 216,0 203,9 193,7 188,3
11,0 10,4 10,6 11,4 10,5 10,9 11,1 11,3 11,3 12,4 12,6 12,8 12,9 12,2 12,4 12,6 Net Interest Income (Cummulated) 36,1 48,2 60,3 73,1 85,4 98,1 110,6 123,5 136,6 1.765,8 1.746,0 1.773,9 1.814,8 1.843,5 1.889,5 1.950,7 Capital Adequacy Ratio (%) 19,1 19,2 17.8* 17,4 16,5 16,2 16,4 16,4 16,3 17,0 17,0 18,0 17,6 17,8 17,4 17,0 Loans/Earning Assets (%) 61,5 62,7 63,7 63,9 64,3 65,6 65,2 64,4 65,7 64,6 64,7 65,6 65,6 66,9 67,1 68,0 Gross Non Performing Loans (%) 3,8 3,5 3,6 3,3 3,4 3,4 3,0 3,6 3,4 2,9 3,1 3,1 3,2 3,2 3,2 3,0 Net Non Performing Loans (%) 1,0 0,9 1,0 0,8 0,9 0,7 0,7 0,9 1,0 0,7 0,9 0,9 0,9 0,9 1,1 0,9 Return on Assets (%) 3,0 2,9 2,9 2,9 2,9 2,8 2,8 2,9 2,8 2,7 3,0 2,8 3,1 3,0 3,0 3,1 Net Interest Margin (%) 5,0 5,0 5,0 5,0 0,5 0,5 0,5 0,5 0,5 0,5 0,5 0,5 0,6 0,5 0,5 0,5
83,6 84,8 84,3 84,8 78,7 78,7 78,9 79,8 79,4 80,0 83,5 80,5 77,8 78,5 78,2 80,0 Loan to Deposit Ratio (%) 75,0 76,5 77,5 77,1 78,1 79,8 78,8 78,5 78,5 76,8 77,2 78,8 78,4 80,0 80,0 81,2
121 121 121 121 122 122 122 122 122 122 121 121 121 121 121 121
13.067 13.078 13.092 13.106 13.381 13.453 13.514 13.591 13.767 13.971 14.103 14.126 14.202 14.273 14.392 14.454
Continue tax administration reform agenda Explore tax potential through intensification (widening tax base) and intensification Increase the quality of tax inspection and investigation Strengthen custom and excise supervision Provide tax incentive and custom facilities
Provide non-energy subsidies (food, fertilizer, seeds, credit interest program) Rely on domestic bond market to finance deficit Widening domestic and international investors base through financing instrument diversification Gradually eliminate external debt Utilize domestic financing sources (Investment Fund Account and assets management) Provide infrastructure financing, e.g. government investment, guarantee, and liquidity facilities Boost infrastructure development (roads, bridges, ports, electricity, disaster rehabilitation) Social security programs, such as health program (Jamkesmas), education (BOS), and society empowerment
program (PNPM) to protect the poor household
Remuneration in order to continue bureaucracy reform agenda Continued LPG conversion program Better targeted electricity subsidy Utilizing alternative energy Control subsidized fuel usage through close distribution system Provide subsidy for bio fuel
Source: Ministry of Finance
31
Source: Ministry of Finance
32
949,7 992,4 995,3 1.104,9 1.169,9 65,0 5,9 I.
PENERIMAAN DALAM NEGERI
948,1 990,5 992,2 1.101,2 1.165,3 64,1 5,8 1. PENERIMAAN PERPAJAKAN 742,7 743,3 723,3 850,3 878,7 28,4 3,3 2. PENERIMAAN NEGARA BUKAN PAJAK 205,4 247,2 268,9 250,9 286,6 35,7 14,2 II. PENERIMAAN HIBAH 1,5 1,9 3,0 3,7 4,7 0,9 24,7
1.047,7 1.126,1 1.042,1 1.229,6 1.320,8 91,2 7,4 I BELANJA PEMERINTAH PUSAT 725,2 781,5 697,4 836,6 908,2 71,7 8,6 A. Belanja K/L 340,1 366,1 332,9 432,8 461,5 28,8 6,6 B. Belanja Non K/L 385,1 415,4 364,5 403,8 446,7 42,9 10,6 II. TRANSFER KE DAERAH 322,4 344,6 344,7 393,0 412,5 19,5 5,0
17,6 (28,1) 41,5 (9,4) (44,3) (34,8) 368,4
(98,0) (133,7) (46,8) (124,7) (150,8) (26,2) 21,0 % Defisit Terhadap PDB (1,6) (2,1) (0,7) (1,8) (2,1) (0,3) 17,5
98,0 133,7 91,6 124,7 150,8 26,2 21,0 I. PEMBIAYAAN DALAM NEGERI 107,9 133,9 96,1 125,3 153,6 28,3 22,6 II. PEMBIAYAAN LUAR NEGERI (neto) (9,9) (0,2) (4,6) (0,6) (2,8) (2,2) 355,6
APBN
2010
ITEM
APBN-P Realisasi
APBN
2011
Nominal persen Selisih thd APBN APBN-P
% deficit of GDP
Original Budget Original Budget Revised Budget Revised Budget Realisati
diferrence
Percent
Revised Budget Realization State Budget Revised Budget
Source: Ministry of Finance
33
Supporting money market and capital market development to strengthen financial system Promoting the creation of investment-oriented society Supporting efficient monetary management
issuance Diversification of financing instruments to widen the market Maintaining the presence of government financial instruments in global market Avoiding crowding out in domestic market
Bank of Indonesia
Source: Ministry of Finance
35
Source: Ministry of Finance Notes: * = Preliminary, GDP number based on Revised Budget 2011 Assumption
[Outstanding as of June, 2011]
Notes: Based on debt outstanding as of June 2011 * = Preliminary , GDP Number Based on Revised Budget 2011 Assumption
57% 47% 39% 35% 33% 28% 26% 25% 2004 2005 2006 2007 2008 2009 2010 2011++
50% 50% 53% 53% 48% 53% 54% 56% 50% 50% 47% 47% 52% 47% 46% 44%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2004 2005 2006 2007 2008 2009 2010 2011++ Domestic Debt External Debt
2004 2005 2006 2007 2008 2009 2010 2011++ GDP 2.295.826,20 2.774.281,00 3.339.480,00 3.949.321,40 4.954.028,90 5.613.441,74 6.422.918,20 6.888.149,80 Debt Outstanding (billion IDR) 1.299.504,02 1.313.294,73 1.302.158,97 1.389.415,00 1.636.740,72 1.590.656,07 1.676.851,19 1.723.896,74
653.032,15 658.670,86 693.117,95 737.125,54 783.855,10 836.308,91 902.429,79 958.396,82
646.471,87 654.623,87 609.041,02 652.289,46 852.885,62 754.347,16 774.421,40 765.499,92 Debt to GDP Ratio 56,60% 47,34% 39% 35% 33% 28% 26% 25%
28,44% 23,74% 21% 19% 16% 15% 14% 14%
28,16% 23,60% 18% 17% 17% 13% 12% 11% End of Year
61 59 64 69 69 63 62 62 67 65 68 69 68 64 73 77 71 71 82 85 83 104 118 132
100 150 200 250 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011++
Loan Government Securities
Source: Ministry of Finance
+ Preliminary numbers, as of June, 2011 [in percentage] Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011++ Loan 47% 48% 47% 47% 49% 47% 43% 42% 45% 38% 37% 34% Government Securities 53% 52% 53% 53% 51% 53% 57% 58% 55% 62% 63% 66% Total Central Government Debt 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
11.4 7.9 1.4 1.7 2.3 6.6 7.7 12.2 15.7 (2) 3 8 13 18 Peru BBB- Indonesia BB Uruguay BB Colombia BB+ Vietnam BB- Philippines BB Romania BB+ Turkey BB India BBB-
Domestic (% GDP) Foreign (% GDP)
Debt maturity profile 2011 Gross borrowing requirements (% GDP)1
Source: Individual Fitch Reports; Ministry of Finance; *Indonesia IMF GDP
1 Calculations include debt servicing
Debt profile shows smooth external repayment profile and a balance between domestic and external debt
Source: Ministry of Finance and Bank Indonesia
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40 60 80 100 120 140
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040- 2055
External Loan Securities [Trillion IDR] Notes:
Promissory to BI
More diversified government bond holders (IDR trillion) Foreign ownership on longer term securities is dominant
39
287,56 300,17 276,65 283,50 281,76 254,36 217,27 220,72 101,00 68,58 87,18 116,09 156,33 219,39 228,19 230,59 10,74 31,09 54,92 78,16 87,61 108,00 195,76 248,87
200,00 300,00 400,00 500,00 600,00 700,00 800,00
Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 29-Jul-11
Foreign Holders Domestic Non-Banks Domestic Banks
Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 29-Jul-11 Total 194.971 200.405 211.574 221.424 225.319 234.992 248.869 >5 132.550 135.846 140.767 145.158 143.260 148.742 159.348 >2-5 33.855 34.633 33.823 35.065 42.134 40.422 42.309 >1-2 7.736 8.858 12.039 12.454 13.227 17.510 16.747 0-1 20.829 21.069 24.945 28.746 26.698 28.318 30.465 50.000 100.000 150.000 200.000 250.000 300.000 [Rp miliar] IDR Billion
Source: Ministry of Finance
IDR Government Bonds : Yield Curve (IDMA)
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3.00 5.00 7.00 9.00 11.00 13.00 15.00 17.00 19.00 21.00 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 15Y 20Y 30Y 10 Aug '11 3 Aug '11 7 May '10 27 Oct '08 13 Sep '05 [in percentage]
Tenor 10-Aug-11 3-Aug-11 7-May-10 27-Oct-08 13-Sep-05 1Y 4.49 4.25 6.64 19.37 2Y 4.87 5.25 7.10 17.35 14.59 3Y 5.72 5.57 7.45 19.93 4Y 6.16 6.10 8.03 17.17 14.14 5Y 6.24 6.24 8.77 17.46 14.96 6Y 6.54 6.45 8.93 17.05 15.24 7Y 6.80 6.70 9.03 17.06 16.17 10Y 6.89 6.88 9.29 20.91 15.75 15Y 7.82 7.61 9.89 16.65 14.12 20Y 8.16 8.00 10.46 20.27 30Y 8.58 8.41 10.55 20.37
Sources: IDMA, Bloomberg
Accumulated cash surplus Funds managed by Government Investment Unit
As set in the memorandum of understanding between MoF and Ministry
buy Government bonds
Parliamentary approval is needed prior to the usage of the funds Government Investment Unit will use its fund to buy Government bonds
in the secondary market for its portfolio Participating SOEs, ie banks, insurance company & other financial institution
Government cash balance Balance sheet SOE
Idle cash
Government has the capacity to support the secondary market whenever
needed
The DMO stands ready to support the domestic bond market as required in the event of substantial capital
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