Recent Economic Developments Published by Investors - - PowerPoint PPT Presentation
REPUBLIC OF INDONESIA Recent Economic Developments Published by Investors Relations Unit Republic of Indonesia Address Bank Indonesia International Directorate Investor Relations Unit Sjafruddin
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 Elsya Chani: elsya_chani@bi.go.id Bimo Epyanto: bimo@bi.go.id Firman Darwis: firman_darwis@bi.go.id Website www.bi.go.id
GDP Growth Inflation
5.7% 5.5% 6.3% 6.0% 4.6% 6.1%
0.01 0.02 0.03 0.04 0.05 0.06 0.07
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 2009 2010 2011 %
CPI (%, yoy) Core (%, yoy) Volatile Food (%, yoy) Administered (%, yoy)
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Balance of Payments Foreign Exchange Reserves
2005 2006 2008 2008 2009 2010*
2009 2010 2011
40 60 80 100
Billion USD
volatile food prices, and in addition to the escalating prices for globally-traded commodities.
US$30.3 billion, increased considerably from the surplus in the preceeding year. The capital & financial account posted a surplus of US$26,2 billion, more than five fold of surplus in the previous year, whereas current account recorded a smaller surplus.
ratings, FDI is expected to continue accelerating. Cumulatively, for 2010 the total investment realization figure was recorded at Rp208.5 trillion, a 54.2% increase compared to the 2009 figure and exceeded by 30.2% of 2010 original target at Rp160.1 trillion.
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consolidation, aiming on:
well below the treshold of 2 (1.74 on end of 2010).
at its February Board of Governors Meeting in 2011, decided to increase the BI Rate by 25 basis points (bps) or 0.25% to 6.75%. The rising inflation expectations call for an appropriate response to avert future inflationary pressures, and with the implementation of monetary and macro prudential policy mix and Government actions to bring down high food commodity prices, inflation is believed can be curbed in line with the target of 5% 1% for 2011 for 2011 and 4.5% 1% for 2012.
Resilient economy, which impressively navigates through the global crisis and continued confidence in economic outlook, the Republic continued to receive good reviews which already upgraded by Moody’s in the beginning of 2011
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.
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. the current administration to outline the framework to deal with structural issues such as infrastructure development.
indicates that Indonesia has big possibility to be upgraded within a year, even maybe faster. The main factor supporting this decision is steadily improving debt metrics and growing foreign currency reserves which reduced vulnerability to shock with continued cautious fiscal management.
The rating action reflects Indonesia’s relative resilience to the severe global financial stress test of 2008-2009 which has been underpinned by continued improvements in the country’s public finances.
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6 7 8 9 10 11 6 7 8 9 10 11 6 7 8 9 10 11 BBB BBB- BB+ BB A- BBB+ Baa2 Baa3 Ba1 Ba2 A3 Baa1
Rating History of Indo (Mood
d Fitch)
Diminished likelihood that the Government will seek additional debt rescheduling Sound record of fiscal management Fitch’s Rating Upgrade on February 2008 S&P upgraded from BB- with a Stable Outlook to BB with a Positive Outlook in March 2010 Fitch’s Rating Upgrade on Jan-10
1 2 3 4 5 Jan-92 Oct-94 Aug-97 May-00 Mar-03 Dec-05 Oct-08 1 2 3 4 5 Jan-92 Apr-94 Jul-96 Sep-98 Dec-00 Mar-03 Jun-05 Sep-07 Dec-09 1 2 3 4 5 Jan-92 Dec-92 Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 BB- B+ B B- CCC+ CCC Ba3 B1 B2 B3 Caa1 Caa2
ndonesia 1994-2010
Rating History of Indone (S&P and Fit
S&P Moody's Fitch
Economic crisis in Asia
Moody’s upgrade to Ba1 in January 17, 2011
Moody’s upgraded in Jun- 10 with a Positive Outlook, after a one-notch upgrade in September 2009
posts an impressive gain of 10 places, mainly driven by a healthier macroeconomic environment and improved education
While most other countries saw their budget deficits surge, Indonesia kept its deficit under control”
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.
timely acknowledgement by the developed economies of the consistent economic improvement. This upgrade 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.
a view to possible membership
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charted 6.9% level of growth in Q4-2010, improved significantly compared to the previous quarter. The positive development was mainly due to significant increase in exports (16.1%) and higher realization of import growth which reached 16.9%, in line with the global economic recovery.
Overall , the economy remains robust and charted higher than predicted growth rate in 2010, supported by a more balanced structure
% yoy
Economic Growth
5.7% 5.5% 6.3% 6.0% 4.6% 6.1%
0.04 0.05 0.06 0.07
contributor to overall economic growth in 2010. Supported also by high growth of investment, both were contributed to the economy in accomplishing 6.1% growth for the whole 2010, from 4.6% in the previous year.
Source: Bank Indonesia.
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0.01 0.02 0.03 2005 2006 2008 2008 2009 2010*
* % yoy
demand along with high consumption growth and high investment as a result of continued promising business prospect.
2011, and to further accelerated to 6.1%-6.6% growth rate in 2012.
Economic Growth: Forecast
Component 2008 2009 2010 2010 2011* 2012* Q1 Q2 Q3 Q4 Gross Domestic Product (GDP) 6,0 4.5 5.7 6.2 5,8 6,9 6,1 6,0 - 6.5 6,1 - 6,6 By Expenditures Private Consumption 5,3 4.9 3.9 5 5.2 4,4 4,6 4,8 - 5,3 4,9 - 5,4 Government Consumption 10,4 15.7 (-8,8) (-8,9) 3,0 7,3 0,3 10,3 - 10,8 1,5 - 2,0 Gross Fixed Capital Formation 11,9 3,3 7,8 7,8 8.9 8,7 8,5 10,4 - 10,9 12,1 - 12,6
* Bank Indonesia Projection Source: Bank Indonesia.
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Economic Growth: Forecast
Sector 2009 2010 2010* 2011* 2012* Q1 Q2 Q3 Q4 GDP 4.5 5.7 6.2 5.8 6.9 6.1 6.0 - 6.5 6.1 - 6.6 Supply Side Agriculture 4.1 3.0 3.1 1.8 3.8 2.9 2.7 - 3.2 3.1 - 3.6 Mining and Quarrying 4.4 3.1 4 2.8 4.2 3.5 3.2 - 3.7 3.4 - 3.9 Manufacturing Industry 2.1 3.7 4.4 4.1 5.3 4.5 4.0 - 4.5 4.1 - 4.6 Electricity, Gas, and Water Supply 13.8 8.2 4.7 3.2 4.3 5.3 6.4 - 6.9 7.4 - 7.9 Construction 7.1 7.1 6.9 6.4 6.7 7.0 7.5 - 8.0 7.8 - 8.3 Trade, Hotel, and Restaurant 1.1 9.4 9.7 8.8 8.4 8.7 9.2 - 9.7 9.2 - 9.7 Transport and Communication 15.5 11.9 12.9 13.3 15.5 13.5 12.1 - 12.6 10.8 - 11.3 Financial, Ownership, and Business 5 5.3 6 6.3 6.3 5.7 6.1 - 6.6 6.1 - 6.6 Services 6.4 4.6 5.3 6.4 7.5 6.0 5.9 - 6.4 6.0 - 6.5 Gross Fixed Capital Formation 11,9 3,3 7,8 7,8 8.9 8,7 8,5 10,4 - 10,9 12,1 - 12,6 Export of Goods and Services 9,5
20 14.6 11.3 16,1 14,9 7,1 - 7,6 7,9 - 8,4 Import of Goods and Services 15,0
22.6 17.7 11 16,9 17,3 9,3 - 9,8 9,4 - 9,9
(yoy) as a result of further crop losses and disruptions in distribution of rice and seasonings. However, administered prices charted moderate inflation at 5.21% (yoy), while core inflation is relatively subdued at a mild 4.18% (yoy).
commodity prices and the Government plan to reduce the fuel subsidy.
Inflation – by component
15.00 20.00
%
CPI (%, yoy) Core (%, yoy) Volatile Food (%, yoy) Administered (%, yoy)
Source: Bank Indonesia
13
0.00 5.00 10.00
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 2009 2010 2011
BI Rate
The decision represents an anticipatory measure to curb the renewed onset of increased inflation expectations, triggered primarily by further steep increases in volatile food prices, in addition to the escalating prices for globally-traded commodities, including oil, and Government policy planning for strategic commodities.
the Board of Governors is confident that inflation can be curbed in line with the target of 5% 1% for 2011 for 2011 and 4.5% 1% for 2012.
11.75%
12% 14% Source: Bank Indonesia.
14
Feb-11
11.75%
8.75% 6.50%
6.75%
0% 2% 4% 6% 8% 10% 12%
Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10
quarter, contributed by surpluses in both the current account, related to buoyant export performance, and the capital & financial account, with a significant increases in the direct investment and government foreign borrowing.
debt service payments.
year surplus of US$ 12.5 billion, supported mainly by a surplus in the capital and financial account.
15 15
which were well below the threshold of 2 (1.74 on January 2010).
was reflected in the relatively high level of Capital Adequacy Ratio (CAR) of 17% and subdued Non-Performing Loans (NPL) at below 5% (2.6%) as of end of December 2010.
Sufficient CAR (%) Sound level of NPLs (%)
Source: Bank Indonesia.
16
1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0
Dec-06 Dec-08 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10
gross NPL net NPL
20.5 19.3 16.2 17.4 19.3 19.1 19.2 17.8 17.4 16.5 16.2 16.4 16.4 16.3 17
10.0 15.0 20.0 25.0
Dec-06 Dec-08 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10
reflected in progressively improving credit growth, recorded in 2010 at 22.8% (yoy) on the strength of expansion in all lending categories including credit to MSMEs.
for productive purposes (working capital loans).
Credit Growth Achievement
297.8 307.96 211.5 336.82
50 100 150 200 250 300 350 400
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2007 2008 2009 2010
Rp Triliun
#$
%& ''
Growth (Rp T)
0% 50% 100%
#$
Growth (%)
YTD mtm
( ( ( () )( )( ( *( ( (*+ *(+ (+ (*+ (+ (*+ 2.4% 17.4% 24.7% + + + + + +
'' " "" '' " ""
,- ' ' ,$./0 ,$.+0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Credit Growth - by purposes Credit Growth - by sector
Banking System Stability remains sound with stable CAR, continuous credit expansion and low NPL (data as of December 2010)
Source: Bank Indonesia
18
The current account in Q4/2010 registered a US$1.2 billion surplus, determined primarily by an upbeat performance in the non-
surplus (US$1.4 billion) as a result of increased in freight services related to imports activities and income payments associated to strong capital inflows. Meanwhile, the capital and financial account in reporting period recorded a surplus of US$9.9 billion, a jump from the preceding quarter surplus (US$6.7 billion). This elevated surplus was explained by higher FDI inflows contributed by the more conducive investment climate and stable macroeconomic conditions and larger net inflows of other investment mainly in the form of government withdrawal. Portfolio investment inflows, however, were much lesser than that in the previous period due to foreign investor cautiousness in responding to the possible ramification of Irish debt crisis. For the whole 2010, the overall balance of payments surplus reached US$30.3 billion, increased considerably from the surplus
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in the preceeding year. The capital & financial account posted a surplus of US$26,2 billion, more than five fold of surplus in the previous year, whereas current account recorded a smaller surplus. Major contributors to such a large financial account surplus were substantial FDI and portfolio investment inflows, despite sizeable
Meanwhile, the current account surplus was lower than the previous year surplus because of higher oil trade deficit as well as the increased payments for freight and income on foreign investment driven by rising imports and foreign capital inflows.
TOTAL TOTAL Q1 Q2 Q3 Q4 TOTAL
126 10,192 2,093 1,603 1,374 1,224 6,294
22,916 30,147 7,045 6,961 7,807 9,279 31,093
15,130 25,541 5,777 5,852 6,677 9,132 27,437
16,147 9,402 2,812 3,113 2,987 3,008 11,920
5,364 4,861 1,169 1,210 1,238 1,334 4,950
ITEMS
milion USD
21
5,002 5,013 4,661 6,669 9,874 26,218
294 96 18 14 32
4,906 4,995 4,661 6,669 9,861 26,186
3,419 2,628 2,484 2,298 1,615 3,439 9,836
1.1 Abroad
1.2 In Indonesia 4)
9,318 4,877 2,911 3,280 2,806 3,739 12,736
1,764 10,336 6,159 1,089 5,994 1,964 15,205
2.1 Assets
190
2.2 Liabilities
3,059 10,480 6,569 1,241 6,114 1,773 15,697
1,274
4,458 1,145
3.1 Assets
1,641
2,608
3.2 Liabilities
3,446 3,794 430
1,349 1,850 3,263
15,194 7,106 6,264 8,044 11,098 32,512
191
12,506 6,621 5,421 6,955 11,289 30,285
* Provisional figures
Million USD
Million USD 22
Non-oil and gas trade balance posted an increased surplus of US$9.1 billion in Q4-2010 (Q3-2010: US$6.7 billion surplus). The strong world demand for resource-based export commodities and a hike on Indonesia’s major export commodity prices were among the factors that boosted the non-oil and gas trade balance performance.The non-oil and gas exports recorded a robust growth
Meanwhile, non-oil and gas imports (fob) grew at 39.9%, driven by strong domestic demand.
The oil & gas trade balance surplus dropped from preceding quarter as a surplus in gas trade balance was counterbalanced by an increased deficit in oil trade balance. The higher oil trade balance deficit resulted from combination of rising world oil price in response to a harsh winter in Europe and the US and declining domestic oil production. These factors lead to decreased export volume and increased import volume. On the contrary, the expected larger gas trade balance surplus was as a consequence of increase in gas price in line with oil price hike.
! "#$ %# ! "#$ %#
deficit in Q3-2010 primarily due to an increased deficit in transportation (freight) in line with import activity and travel. The latter was especially related to tourist
around $6.6 billion in correspondence with higher profit transfers/devidend payment due to higher FDI inflows,
Million USD
23
transfers/devidend payment due to higher FDI inflows, while interest payment declined due to a substantial drop in domestic securities held by foreigners.
current transfers surplus slightly increased mainly due to higher workers’ remittances inflows.
%## ()#! *##
Million USD
Million USD
24
The financial account achieved a surplus of US$9.9 billion in Q4- 2010, a jump from the preceding quarter surplus. This significant increase came from higher inflows
direct investment in response to more conducive investment climate and stable macroeconomic conditions, as well as increased inflows of
deposit withdrawal. Those increases surpassed a substantial drop in portfolio investment inflows, related to foreign investors’ cautiousness following the Irish debt crisis.
,*'##
. % /%%)
The residents’ investment abroad (the financial account - assets) posted a net inflows of US$2.5 billion in Q4-2010, compared to a substantial net outflows of US$3.6 billion in Q3-2010. This is primarily explained by mounted drawing on resident deposits in
response to foreign exchange liquidity need in domestic market.
,*'##
. % /%%)
In line with the more conducive investment climate and stable macroeconomic conditions, a higher Foreign Direct Investment (FDI) inflows of US$3.7 billion achieved in Q4- 2010, both in oil/gas and non-oil/gas sectors, related to expanding operational and investment activities in these sectors.
Million USD 25
)*012)3+#57# 3#6 !
#! $! %)!"!!
Million USD
#! %!*!!
Million USD
26
Foreign portfolio investment recorded a US$1.8 billion surplus in Q4-2010, plunged from US$6.1 billion surplus in the preceding period. A significant outflow resulted from foreign investor withdrawal from rupiah denominated instruments during November-December 2010 in response to Irish debt crisis was the main factor behind the downturn in foreign portfolio investment.
+#5&#%)## !
Foreign other investment booked a US$1.9 billion surplus in Q4-2010, higher than a US$1.3 billion surplus in Q3-2010. This upturn was mainly caused by higher foreign debt disbursement by government. In the private sector, corporate sectors also showed an increase foreign loans drawdown. However, debt repayments scheduled to be paid by the private sector were also higher during the period.
,' #&#% !
102.2%, driven by high non-tax revenue collection which was 108%. Tax revenue realization was 100.1%
2009 realization at the same periode which was IDR645.4 T (89.9%)
debt since 2004.
and fiscal targets
28
29
Source: Ministry of Finance
Revised Budget 2010 Realization of Revised Budget 2010* % of Revised Budget 2010 Budget 2011 992.4 1,014.0 102.2 1,104.9 743.3 744,1 100.1 850.3 247.2 267.5 108.2 250.9 1,126.1 1,053.5 93.5 1,229.6 781.5 708.7 90.7 836.6 144.0 140.0 97.2 136.6
88.9 82.4 92.6 95.9 (IDR Trillions) ITEMS
As of Dec 31 2010
30
88.9 82.4 92.6 95.9 55.1 57.6 104.5 40.7 344.6 344.7 100.0 393.0
29.5
133.7 86.6 64.7
133.9 95.0 71.0 125.3
% GDP
In trillion IDR
! " # $ % & ! " ' ( ) * & % + * , ( - " . /
31
Source: Ministry of Finance
prioritized
securities – Fixed-rate – Variable rate – T-Bills – Zero coupon Net Issuance Realization as of Jan 27, 2011
"$%# &'"($)#
Zero coupon – Retail bonds – Syariah securities – Sukuk and Retail Sukuk
Source: Ministry of Finance 1. Redemption and buyback amount subject to change 2. GDS stands for Government Debt Securities (SUN)
#*+12
"#
34
issuance
Bank of Indonesia
Notes: *) Based on budget 2010 realization
50% 50% 53% 53% 48% 53% 55% 50% 50% 47% 47% 52% 47% 45%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2004 2005 2006 2007 2008 2009 Nov 10* Domestic Debt External Debt
Debt to GDP Ratio Debt Composition
Notes: * = Preliminary, GDP number based on Budget 2010 Assumption [Outstanding as of Nov, 2010]
*) Based on budget 2010 realization
.).
%)%$/$
/%%3 .$%3 3 03 3 3 %3
/3 .3 /3 $3 $3 .3 3 $%& '()
Table of Debt to GDP Ratio
10 20 30 40 50 60 70
trillion rupiah
Source: Ministry of Finance
ZCB : Zero Coupon bond SPN : T’bills IFR : Islamic Fixed Rate Bond IB : International Bond ORI : Retail Bond SR : Retail Sukuk VR : Variable Rate Bond FR : Fixed Rate Bond RIJPY : Samurai Bond 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 … 2034 2035 2036 2037 2038 Total 65. 60. 56. 56. 51. 42. 40. 47. 55. 68. 25. 25. 21. 18. 27. 6.3 14. 20.
15.
33. SNI
8.0
1.9
6.5
1.2
27.
9.0 8.1 9.0 17. 18. 18.
18. ORI 8.7 21. 10.
6.0 4.3
17. 18. 16. 17. 22. 25.
22. 27. 35. 15. 19. 15. 14. 10. 10. 17. 25. 25. 21. 18. 26. 6.3 14. 20.
15.
15.
10
Developments in the Domestic Market
150,000 200,000 [Rp miliar]
67,04% 67,16% [Trillion IDR]
37
Dec-07 Dec-08 Dec-09 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 26-Jan-11 Total 78,156 87,606 107,997 162,055 172,221 177,991 182,265 191,991 191,199 195,755 189,761 >5 52,294 61,055 76,702 116,675 118,854 122,199 125,956 128,489 128,257 131,232 127,439 >2-5 17,243 20,374 21,361 28,632 31,737 32,503 33,274 38,375 38,143 35,511 34,559 >1-2 4,374 4,491 5,119 6,742 8,345 8,689 5,462 4,623 5,811 9,077 7,383 0-1 4,246 1,687 4,816 10,006 13,284 14,601 17,573 20,505 18,988 19,935 20,380 50,000 100,000
18,14% 4,64% 18,21% 3,89% 10,18% 10,74%
Loan Disbursement
Foreign Debt Indicators
38