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7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
1/58
Indonesia Economic Outlook 2016
Catching Opportunities am
Global Volatility
Josua Pardede
Economist
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
2/58
Outline
Global Economy
Indonesia Economy
Credit Outlook
Liquidity Condition
Economic & FX Outlook
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
3/58
Global Economy
G L B A L
Economy
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
4/58
Global EconomyGlobal Growth Forecast - Modest
Source: IMF and PermataBank Economic Research
3.4
2.42.9
0.8
-0.1
7.4
3.12.6 2.5
1.5
0.6
6.8
3.6
2.8
2.2
1.6
1.0
6
World
US
UK
EuroZone
Japan
China
Global Growth (%yoy)
2014 2015 2016
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
5/58
Global growth slowdown persists as manufacturing
activities keep slowing
Source: Bloomberg and PermataBank Economic Research
46
47
4849
50
51
52
53
54
55
56
57
58
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
J u l - 1 5
IndexEuro Zone US China Japan Global
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
6/58
Global EconomyStrengthening US dollar threatens Emerging Markets
Source: Bloomberg and PermataBank Economic Research
400
500
600700
800
900
1,000
1,100
1,200
1,300
1,400
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
O
1 4
MSCIE
mergingMarketsIndex
MSCI Emerging Markets Index US Dollar
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
7/58
Global EconomyStrong negative correlation since 2010
Source: Bloomberg and PermataBank Economic Research
70
75
80
85
90
95
100
105
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
O c t 1 4
USDollarIndex
US Dollar Index WTI Oil
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
8/58
Global EconomyEl Nino have impacted falling food price
Source: IMF and PermataBank Economic Research
-30
-20
-10
0
10
20
30
Jan-0
7
Sep-0
7
May-0
8
Jan-0
9
Sep-0
9
May-1
0
Jan-1
1
Sep-1
1
May-1
2
Jan-1
3
Sep-1
3
May-1
4
Jan-1
5
El Nino Index (LHS) Food
Beverages Raw materials
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
9/58
Oil price is expected to slightly inch up, while CPO and
coal are expected to decline
Source: EIU and PermataBank Economic Research
53.4 48.4
10.2
622.8
60 55.1
9.6
539.5
72.7 67.6
10.8
Oil: Brent (US$/b) Oil: WTI (US$/b) Coal (US$/tonne,
Australia)
Palm oil (US$/
Commodity Prices Forecast
2015 2016 2017
US E
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
10/58
US Economy
Econom
mixed
Unempgoes d
growin
but the
remain
US nee
increarates t
econom
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
11/58
Global Economic Review & OutlookUS economy continues to recover at moderate pace
Source: Bloomberg and PermataBank Economic Research
The US economy grew at a 2.5%yoy in average during three quarters in this year. The report comes
debate whether growth is strong enough to withstand the first increase in the benchmark interest rate sinc
We expect the real GDP to grow by2.3%-2.5%yoyin 2015.
-6
-4
-2
0
2
4
6
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2005 2006 2007 2008 2009 2010 2011 2012 2013
%yoy
GDP Inflation
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
12/58
Global Economic Review & OutlookLow energy prices are curtailing inflation
Source: Bloomberg and PermataBank Economic Research
PCE (Personal Consumption Expenditure) core increased at annualized rate of1.31% in September
1.28% in August. PCE core is viewed by the Federal Reserve as a better gauge of longer-term infla
because they exclude the volatile food and energy categories. The central bank usually tries to aim f
inflation or less.
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
%yoy
PCE Core (%yoy) PCE (%yoy)
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
13/58
Global Economic Review & OutlookFurther improvement in labor market
Source: Bloomberg and PermataBank Economic Research
The U.S. economy added 271,000 jobs inOct15, the highest in this year, up from 137,000 in S
The unemployment rate unchanged at 5.0% inOct15, its lowest level since April 2008. This d
the unemployment rate in line with the 5-5.2% range of the Fedstarget.
4
5
6
7
8
9
10
Jan-05
Apr-05
J
ul-05
O
ct-05
Jan-06
Apr-06
J
ul-06
O
ct-06
Jan-07
Apr-07
J
ul-07
O
ct-07
Jan-08
Apr-08
J
ul-08
O
ct-08
Jan-09
Apr-09
J
ul-09
O
ct-09
Jan-10
Apr-10
J
ul-10
O
ct-10
Jan-11
Apr-11
J
ul-11
O
ct-11
Jan-12
Apr-12
J
ul-12
O
ct-12
Jan-13
Apr-13
J
ul-13
O
ct-13
Jan-14
Apr-14
J
ul-14
O
ct-14
Jan-15
% Change in Non-Farm Payrols (RHS) Unemployment Rate
Gl b l E i R i & O l k
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
14/58
Global Economic Review & OutlookDeclining labor force participation
Source: Bloomberg and PermataBank Economic Research
62
63
64
65
66
67
Jan-0
5
Apr-05
Jul-05
Oct-05
Jan-0
6
Apr-06
Jul-06
Oct-06
Jan-0
7
Apr-07
Jul-07
Oct-07
Jan-0
8
Apr-08
Jul-08
Oct-08
Jan-0
9
Apr-09
Jul-09
Oct-09
Jan-1
0
Apr-10
Jul-10
Oct-10
Jan-1
1
Apr-11
Jul-11
Oct-11
Jan-1
2
Apr-12
Jul-12
Oct-12
Jan-1
3
Apr-13
Jul-13
Oct-13
Jan-1
4
Apr-14
Jul-14
Oct-14
Jan-1
5
% Labor Force Participation Unemployment Rate (RHS
The probability of Fed rate hike in Dec15 or Jan16 increased after release of hawkish
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
15/58
The probability of Fed rate hike in Dec15 or Jan16 increased after release of hawkish
tone from FOMC meeting in Oct15 and release of NFP in Oct15.
Source: Bloomberg and PermataBank Economic Research
0
10
20
30
40
50
60
70
80
Jan-1
5
Feb-1
5
Mar-15
Apr-15
May-1
5
Jun-1
5
Jul-15
Aug-1
5
Sep-1
5
Oct-15
Probability of the first US interest rate hike
Dec'15 Jan'16 Mar'16
China Economy
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
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China Economy
China Cen
monetaryboost lend
China has
by almost
boost
performan
China is likstabilizatio
coming m
China Econom
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
17/58
China Economy
Decelerated since 2010 to near 7.0% in 2015
Source: Bloomberg and PermataBank Economic Research
Diverging growth in investment
-4
-2
0
2
4
6
8
10
0
2
4
6
8
10
12
14
16
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
%yoy%yoy
GDP Inflation (RHS)
5
10
15
20
25
30
35
Jan-0
5
May-0
5
Sep-0
5
Jan-0
6
May-0
6
Sep-0
6
Jan-0
7
May-0
7
Sep-0
7
Jan-0
8
May-0
8
Sep-0
8
Jan-0
9
May-0
9
Sep-0
9
Jan-1
0
May-1
0
Sep-1
0
Jan-1
1
%yoy Fixed Asset Investment
China: lower growth uncertain prospect
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
18/58
China: lower growth, uncertain prospectSpreading the negative spillover to EM
Source: Bloomberg and PermataBank Economic Research
Exports hurt by weak global demaManufacturing is still weighed down by weak
production growth
89
10
11
12
13
14
15
16
4546
47
48
49
50
51
52
53
5455
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
%yoyPMI Manufacturing Retail Sales (RHS)
-60-40
-20
0
20
40
60
80
100
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
M a y 1 1
%yoy
Trade Balance (RHS) Ex
China Economy
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
19/58
China Economy
Yuans devaluation: to revive economy??
Source: Bloomberg and PermataBank Economic Research
Devaluing Yuan will lead to near-term capital flight
before market equilibrium with dollar can be achievedChinas REER is much stronger
currencies
6
6.5
7
7.5
8
8.5
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
Bln Foreign Reserves USD/CNY (RHS)
60
70
80
90
100
110
120
130
140
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
CNY IDR THB
China: lower growth uncertain prospect
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
20/58
China: lower growth, uncertain prospectChina cuts banks' reserve ratio to boost lending
Source: Bloomberg and PermataBank Economic Research
PBOC cut benchmark interest rates with effective from
26Aug15
Loan growth trends up recently
bank financial institution loans
5
10
15
20
25
30
35
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-0
8
May-0
8
Sep-0
8
Jan-0
9
May-0
9
Sep-0
9
Jan-1
0
May-1
0
Sep-1
0
J a n 1 1
%yoy Loan Growth D
15
16
17
18
19
20
21
22
1
2
3
4
5
6
7
Oct-10
Dec-10
Feb-11
Apr-11
Jun-11
Aug-11
Oct-11
Dec-11
Feb-12
Apr-12
Jun-12
Aug-12
Oct-12
Dec-12
Feb-13
Apr-13
Jun-13
Aug-13
Oct-13
Dec-13
Feb-14
Apr-14
Jun-14
Aug-14
Oct-14
Dec-14
Feb-15
Apr-15
Jun-15
Aug-15
Oct-15
%% Lending Rate Deposit Rate Reserve Requirement (RHS)
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
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Domestic Economy
D O M E S T I C
Economy
L t t D l t
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
22/58
Latest Developments
2.16%ytd6.25%yoy
INFLATION IN OCT
INFLATION YE2015
3.5%-4.0%
CAD 2Q15
2.05% GDPVS
2Q14
4.26% GDP
FX ReserveUSD 100.7 bn (Oct)
= 6.6 month imports& Govt. foreign
debt service
GDP 2015
is expected to grow to
4.70-4.75%compared to
5.02% in 2014.
E
Im
T
Indonesia GDP slightly improved in 3Q15,
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
23/58
g y p Q ,
though below than BI & govt. expectation
Source: Indonesia Statistics and PermataBank Economic Research
0
1
2
3
4
5
6
7
8
9
10
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
%yoyGDP Growth
Extractives growth was a record low.
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
24/58
g
Trade sector, the biggest non-tradable slowed down
significantly
Source: Indonesia Statistics and PermataBank Economic Research
Q1 Q2 Q3 4Q Q1 Q2
Agriculture, Forestry & Fishery 5.3 5.0 3.6 2.8 4.0 6.8
Mining And Quarrying -2.0 1.1 0.8 2.2 -1.5 -6.
Manufacturing 4.5 4.8 5.0 4.2 4.0 4.Electricity And Gas Supply 3.3 6.5 6.0 6.5 1.7 0.
Water Supply, Sewerage, Waste Management And Remediation Activitie 3.6 3.2 2.8 2.7 2.9 6.
Construction 7.2 6.5 6.5 7.7 6.0 5.4
Wholesale & Retail Trade, Vehicle Repair 6.1 5.1 4.8 3.5 4.0 1.
Transportation & Storage 8.4 8.5 8.0 7.1 6.3 6.
Accomm odation & Food Service Activity 6.5 6.4 5.9 4.9 3.6 3.9
Information & Communication 9.8 10.5 9.8 10.0 10.1 9.
Financial & Insurance Services 3.2 4.9 1.5 10.2 7.6 2.Real Estate 4.7 4.9 5.1 5.3 5.3 5.
Business Services 10.3 10.0 9.3 9.7 7.4 7.6
Public Administration And Defence; Compulsory Social Security 2.9 -2.5 2.6 6.9 4.7 6.6
Education 5.2 5.4 7.3 7.1 5.8 12
Human Health And Social Work Activities 7.7 8.5 9.9 6.1 7.3 8.2
Other Services Activities 8.4 9.5 9.5 8.4 8.0 8.
Gross Domestic Product 5.1 5.0 4.9 5.0 4.7 4.
Sector 2014
Exports still contracting. Investment and government spending
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
25/58
p g g p gwere the dominant factors. Private consumption is at record low
Source: Indonesia Statistics and PermataBank Economic Research
4.7
4.0
4.5
5.0
5.5
6.0
6.5
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2012 2013 2014 2015
%yoyGDP
5.0
4.0
4.5
5.0
5.5
6.0
6.5
7.0
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3
2012 2013 2014 2015
%yoyPrivate Consumption
-5.0
0.0
5.0
10.0
15.0
20.0
Q1Q2Q3Q4Q1
2012
%yoyGo
4.6
2.0
4.0
6.0
8.0
10.0
12.0
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3
2012 2013 2014 2015
%yoy Investment
-0.7
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.08.0
10.0
12.0
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3
2012 2013 2014 2015
%yoyExports
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
Q1Q2Q3Q4Q
2012
%yoyI
Weaker consumption signals
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
26/58
p g
Source: Indonesia Statistics and PermataBank Economic Research
The consumer confidretail sales and cement
indicate weaker
throughout the year in
trend is likely to continu
0
1
2
3
4
5
6
7
Jan-0
5
May-0
5
Sep-0
5
Jan-0
6
May-0
6
Sep-0
6
Jan-0
7
May-0
7
Sep-0
7
Jan-0
8
May-0
8
Sep-0
8
Jan-0
9
May-0
9
Sep-0
9
Jan-1
0
May-1
0
Sep-1
0
Jan-1
1
May-1
1
S e p - 1
1
Million Ton Cement Consumption
95
100
105
110
115
120
125
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Consumer Confidence Index
-10
-5
0
5
10
15
20
25
30
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
%yoy
Retail Sales
Automotive sector: 4-Wheeler Industry
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
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Automotive sector: 4-Wheeler Industry
FY2014 4W sales reached 1.21million units, down by 1.78%yoy from sales in 2013 at 1.23
Slowing car sales in 2015 was driven by moderation in private consumption amid slowing d
9M2015 4W sales reached 764,683 units, down by 18.01%yoy from sales in 9M2014 at 93
97
103
96
102100
104
112
78
116112 112
98
104
112 113
106
97
111
9197
103 105
91
79
94
89
9
0
20
40
60
80
100
120
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
M a r 1 5
('000units)
FY13: 1.23m units (+10.18%yoy)
FY14: 1.21m units (-1.78%yoy)9M2014: 932,668 u
9M2015: 764,683 u
Automotive sector: 2-Wheeler Industry
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
28/58
Automotive sector: 2 Wheeler Industry
FY2014 2W sales reached 7.87million units, up by 1.59%yoy from sales in 2013 at 7.74
9M2015 2W sales reached 4.82million units, down by 20.35%yoy from sales in 9M20
units.
646 649
665 659645
660
702
489
676
714687
551
579
679
726 728 740
751
534
609
707
676
582556
503
556 54
0
100
200
300
400
500
600
700
800
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
M a r 1 5
('000units)
FY13: 7.74m units (+9.62%yoy)
FY14: 7.87m units (+1.59%yoy)
9M2014: 6.05m u
9M2015: 4.82m u
Indonesia Economic Review & Outlook
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
29/58
Inflation will start to stabilize in Nov15
Source: Indonesia Statistics and PermataBank Economic Research
Headline inflation remains above BIs5.0% comfort level (6.25%yoy in Oct or 2.1
likely normalized by the end of this year.
Core CPI (demand inflation) remains subdued, indicating slowing domestic demand
All in all, we think that inflation will start to stabilize inNov15 and will record within ra
by the end of this year..
2
4
6
8
10
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Inflation BI rate Core Inflation
Indonesia Economic Review & OutlookE i d i h d b d li i di i i
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
30/58
Export remained weighed by declining commodities prices
Source: Indonesia Statistics and PermataBank Economic Research
Both imports and exports continued to contract in 2015, as we expect both domestic a
demand conditions remained in a weak stage to support economic growth entering 3Q
-3,000
-2,000
-1,000
0
1,000
2,000
3,000
4,000
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
USD mn Trade Balance (LHS) Export Import
Indonesia Economic Review & OutlookHi h d d diti
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
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High dependency on commodities
Source: Bloomberg and PermataBank Economic Research
Commodity prices: Oil: -10.1%ytd
Coal: -17.6%ytd
CPO: -23.5%ytd
Rubber: -22.4%ytd
300
500
700
900
1100
1300
1500
30
50
70
90
110
130
150
170
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
USD/tonUSD/barelOil Price CPO (RHS)
20
40
60
80
100
120
140
160
180
200
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
USD/barelCoal (RHS) Oil Pr ic
1
1.5
2
2.5
3
3.5
4
4.5
5
5.5
6
30
50
70
90
110
130
150
170
Ja
n-07
Apr-07
Jul-07
Oct-07
Ja
n-08
Apr-08
Jul-08
Oct-08
Ja
n-09
Apr-09
Jul-09
Oct-09
Ja
n-10
Apr-10
Jul-10
Oct-10
Ja
n-11
Apr-11
Jul-11
Oct-11
Ja
n-12
Apr-12
Jul-12
Oct-12
Ja
n-13
Apr-13
Jul-13
Oct-13
Ja
n-14
Apr-14
Jul-14
Oct-14
Ja
n-15
Apr-15
Jul-15
Oct-15
USD/kgUSD/barelOil Price Rubber (RHS)
Indonesia Economic Review & Outlook
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
32/58
Source: Bank Indonesia
Current Account Deficit (CAD) eased to 2.05% GDP in 2Q15 from 4.26% GDP in 2Q14. Overall,
to improve to 2.35% of GDP in 2014 from 2.95% of GDP in 2014.
Indonesia Economic Review & OutlookL t bl IDR > i BI i t ti
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
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Less-stable IDR-> aggressive BIs intervention
Source: Indonesia Statistics and PermataBank Economic Research
90
95
100
105
110
115
Jan-1
4
Feb-1
4
Mar-14
Apr-14
May-1
4
Jun-1
4
Jul-14
Aug-1
4
Sep-1
4
Oct-14
Nov-1
4
Dec-1
4
Jan-1
5
Feb-1
5
Mar-15
Apr-15
May-1
5
Jun-1
5
Jul-15
Aug-1
5
Sep-1
5
USD blnForeign Reserves USD/IDR (RHS)
Indonesia Economic Review & OutlookUS d ll i t d id i d l tilit
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US dollar appreciated amid increased volatility
Source: Bloomberg and PermataBank Economic Research
0.1
-0.7
-1.7
-1.8
-2.9
-3.4
-3.6
-4.5
-5.4
-7.5
-9.6
-18.7
HKD
JPY
CNH
CNY
TWD
INR
KRW
PHP
SGD
THBIDR
MYR
Asian Currencies YTD Performance (%)
as per 30 Oct'15
Indonesia Economic Review & OutlookFX market tend to be more volatile on US rate hike expectation
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
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FX market tend to be more volatile on US rate hike expectation
Source: Bloomberg and PermataBank Economic Research
7
8
8
9
9
1
1
0
2
4
6
8
10
12
14
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Emerging Market Vol G7 Vol USD Index (RHS)
Current Rupiah is far from its fundamental
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
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Source: Bloomberg and PermataBank Economic Research
50
60
70
80
90
100
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
J a n 1 5
REER IndexREER USD/IDR
Indonesia Economic Review & OutlookJCI corrected 14 8%YTD; bonds declined 5 0%YTD (as per Oct15)
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
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JCI corrected 14.8%YTD; bonds declined 5.0%YTD (as per Oct 15)
Source: Bloomberg and PermataBank Economic Research
Foreign outflows of $375mn in stocks & inflows Rp4.6tn in bonds (Oct15) Indonesia stock market vs
3,900
4,100
4,300
4,500
4,700
4,900
5,100
5,300
5,500
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
JCI JCI I
100
150
200
250
300
350
400
450500
550
600
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
IDR tn Foreign Ownership % F
-2,098
-1,083
801
10
-710-498
-375
-2,500
-2,000
-1,500
-1,000
-500
0
500
1,000
1,500
2,000
4,000
4,200
4,400
4,600
4,800
5,000
5,200
5,400
5,600
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
USD mlnJCINet Foreign Buy/Sell (RHS) JCI
-20.0 -19.9
39.5
6.8
-3.6
4.16.3
23.0
-3.9-8.0
-1.2
4.6
-30
-20
-10
0
10
20
30
40
50
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
IDR tn% Net Foreign Buy/Sell (RHS) 10yr IDR Bond
Valuation is attractive: Spread yield betweenINDON yield and UST yield is wide
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INDON yield and UST yield is wide
Source: Bloomberg and PermataBank Economic Research
140
160
180
200
220
240
260
280
300
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Sovereign Risk Premium (RHS)
INDON 10-YR
UST 10-YR
Yield spread between 10yr INDON and the 10yr UST was up by 18.2% in Sep15 w
by 28.9% as per 20 Oct15.
Rupiah volatility was one of the main factors discouraging foreign investors
Indonesia. This resulted in higher exchange rate risk. This is depicted by the yie
Rupiah and USD denominated Government bonds. The currency risk premium re
September though it already decline to 458.1bps as per 20 Oct15.
1.01.52.02.53.03.54.04.55.05.56.0
6.57.07.58.08.59.09.5
10.0
Jan-1
4
Feb-1
4
Mar-14
Apr-14
May-1
4
Jun-1
4
Jul-14
Aug-1
4
Sep-1
4
Oct-14
Nov-1
4
Dec-1
4
Jan-1
5
Feb-1
5
Currency Risk PremiumSUN 10-YRINDON 10-YR
Monetary policy
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
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o eta y po cy
M N E T A R Y
Policy
BI Meeting 15 Oct 2015
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
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Source: Bank Indonesia
BI kept BI rate unchanged at 7.50% with the deposit and lending facilities steady
respectively.
BI: domestic economy and financial global condition improved.
BI hinted at loosening.
Our view: BI rate cut likely next year IF there is a sign of further rupiah stabilizatio
hike on Indonesia capital market not too significant.
3
4
5
6
7
8
9
Ja
n-13
Fe
b-13
Ma
r-13
Ap
r-13
Ma
y-13
Ju
n-13
Jul-13
Au
g-13
Se
p-13
Oct-13
No
v-13
De
c-13
Ja
n-14
Fe
b-14
Ma
r-14
Ap
r-14
Ma
y-14
Ju
n-14
Jul-14
Au
g-14
Se
p-14
Oct-14
No
v-14
De
c-14
Ja
n-15
Fe
b-15
Ma
r-15
Ap
r-15
Ma
y-15
Ju
n-15
Jul-15
A u
g - 1 5
% Inflation BI rate Core Inflation
Banking sector
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
41/58
Source: Bank Indonesia and PermataBank Economic Research
Banking sector: Loan Growth to slightlyimprove in 2016
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
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improve in 2016
Source: Bank Indonesia
Total industry loans finally saw some improvement, growing 10.9%yoy or 7.5%ytd in Sep15. Total depos
7.7%ytd.
Liquidity improved slightly. The industry's LDR remained unchanged at 88.9% in Sep15.
Investment loans started to improve again, growing at 13.0%yoy in Sep from 12.9% in Aug, while working
10.3%yoy vs. 10.2% in Aug. Consumption loans remained subdued, growing at 10.2%yoy in Sep, up slightly
0
5
10
15
20
25
30
35
40
45
Jan-0
3
Sep-0
3
May-0
4
Jan-0
5
Sep-0
5
May-0
6
Jan-0
7
Sep-0
7
May-0
8
Jan-0
9
Sep-0
9
May-1
0
Jan-1
1
Sep-1
1
May-1
2
Jan-1
3
Sep-1
3
May-1
4
Jan-1
5
%yoyDeposit growth Loan growth LDR (RHS)
Banking sector: Loan Growth to slightlyimprove in 2016
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
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improve in 2016
Source: Bank Indonesia
The positive causality between the economic and credit growth reflect the e
cyclicality relation between the two variables. The causality relationship te
dominant role of the economic growth as the lead variable, rather than the credit
5
10
15
20
25
30
35
40
Jan-0
3
Sep-0
3
May-0
4
Jan-0
5
Sep-0
5
May-0
6
Jan-0
7
Sep-0
7
May-0
8
Jan-0
9
Sep-0
9
May-1
0
Jan-1
1
Sep-1
1
May-1
2
Jan-1
3
Sep-1
3
May-1
4
Jan-1
5
Sep-1
5
Credit_growth GDP_growth
Credit/GDP ratio rose faster than M2/GDP
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
44/58
Source: Bank Indonesia
A higher ratio of M2 to GDP indicates a larger financial sector which means
intermediation capacity.
Credit to GDP ratio represents the actual amount of funds that are chann
economy.
15
20
25
30
35
40
Jan-02
May-02
Sep-02
Jan-03
May-03
Sep-03
Jan-04
May-04
Sep-04
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
%% Credit/GDP M2/GDP (RHS)
Financial deepening benefits growth
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
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Source: Bank Indonesia
Financial development in Indonesia benefits growth since financial development
a relatively early stage, such that an expansion of the financial industry tends
with an increase in firmsaccess to finance.
Beyond a certain point, financial development does not appear to contribute sig
economy.
15
20
25
30
35
40
Jan-0
2
May-0
2
Sep-0
2
Jan-0
3
May-0
3
Sep-0
3
Jan-0
4
May-0
4
Sep-0
4
Jan-0
5
May-0
5
Sep-0
5
Jan-0
6
May-0
6
Sep-0
6
Jan-0
7
May-0
7
Sep-0
7
Jan-0
8
May-0
8
Sep-0
8
Jan-0
9
May-0
9
Sep-0
9
Jan-1
0
May-1
0
Sep-1
0
Jan-1
1
May-1
1
Sep-1
1
Jan-1
2
May-1
2
Sep-1
2
Jan-1
3
May-1
3
Sep-1
3
Jan-1
4
May-1
4
Sep-1
4
Jan-1
5
May-1
5
Sep-1
5
%y% Credit/GDP GDP Growth (RHS)
Liquidity condition: LDR is relatively high
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
46/58
Source: Bank Indonesia
Slowing growth of LDR reflects that the expansion of credit has
tighter liquidity..
40
50
60
70
80
90
100
Jan-03
Sep-03
May-04
Jan-05
Sep-05
May-06
Jan-07
Sep-07
May-08
Jan-09
Sep-09
May-10
Jan-11
Sep-11
May-12
Jan-13
Sep-13
May-14
Jan-15
S e p - 1 5
%%LDR LDR_growth (RHS)
Liquidity condition: Funding gap increased
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
47/58
Source: Bank Indonesia
Funding gap increased over the past years is mainly caused by stee
outstanding loans as well as declining liquidity condition..
-80
-60
-40
-20
0
2040
60
80
100
0
20
40
60
80
100
120
140
Jan-03
Sep-03
May-04
Jan-05
Sep-05
May-06
Jan-07
Sep-07
May-08
Jan-09
Sep-09
May-10
Jan-11
Sep-11
May-12
Jan-13
Sep-13
May-14
Jan-15
Sep-15
%yoy% Funding Gap Funding Gap_growth (RHS)
Liquidity condition: liquid asset has declined
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
48/58
Source: Bank Indonesia
The availability of liquid asset to face potency of withdrawal of th
declined, indicating that liquidity risk tends to rise.
15
20
25
30
Jan-1
2
Feb-1
2
Mar-12
Apr-12
May-1
2
Jun-1
2
Jul-12
Aug-1
2
Sep-1
2
Oct-12
Nov-1
2
Dec-1
2
Jan-1
3
Feb-1
3
Mar-13
Apr-13
May-1
3
Jun-1
3
Jul-13
Aug-1
3
Sep-1
3
Oct-13
Nov-1
3
Dec-1
3
Jan-1
4
Feb-1
4
Mar-14
Apr-14
May-1
4
Jun-1
4
Jul-14
Aug-1
4
Sep-1
4
Oct-14
Nov-1
4
Dec-1
4
Jan-1
5
Feb-1
5
Mar-15
Apr-15
May-1
5
Jun-1
5
Jul-15
Aug-1
5
% Liquid Asset/Third Party Fund
120
130
140
150
160
170
180
190
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
%Liquid Asset/Non Core D
Liquidity condition: higher spread indicates thelimitation of banks to get funding in the market
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
49/58
Source: Bank Indonesia
0
5
10
15
20
25
30
35
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
%
Spread PUAB (high-low) PUAB_HIGH
0
5
10
15
20
Jan-00
Oct-00
Jul-01
Apr-02
Jan-03
Oct-03
Jul-04
Apr-05
Jan-06
Oct-06
Jul-07
Apr-08
Jan-09
Oct-09
%Spread (JIBOR_LIBOR) JIBOR 3 mon
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
0
2
4
6
8
10
12
14
Jul-05
Sep-05
Nov-05
Jan-06
Mar-06
May-06
Jul-06
Sep-06
Nov-06
Jan-07
Mar-07
May-07
Jul-07
Sep-07
Nov-07
Jan-0
8
Mar-08
May-0
8
Jul-08
Sep-0
8
Nov-0
8
Jan-0
9
Mar-09
May-0
9
Jul-09
Sep-0
9
Nov-0
9
Jan-1
0
Mar-10
May-1
0
Jul-10
Sep-1
0
Nov-1
0
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-1
2
Mar-12
May-1
2
Jul-12
Sep-1
2
Nov-1
2
Jan-1
3
Mar-13
May-1
3
Jul-13
Sep-1
3
Nov-1
3
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep-15
%% Spread 3 mo TD Rate BI Rate
Outlook 2015Facing risks ahead..
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Global
Expectations of higher US interest rates
Weak commodity prices will keep Indonesiasexports weak Chinasfurther devaluation or PBOC loosening monetary policy will lead
currencies
Domestic
Rupiah instability will lead to capital flight of foreign hot money
Dependency on commodities will shrink exports performance Government spending needed in short term to stimulate private consumpt
Deepening Indonesia financial market in order to attract investment
Outlook 2016Scenarios
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
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Optimistic
BI Rate: 7.25%
JCI Index: 5,000
Bond yield (10yr):8.00%
USD/IDR:13,500
Moderate
BI Rate: 7.50%
JCI Index:4,600
Bond yield (10yr):8.75%
USD/IDR:13,900
Pessimistic
BI Rate: 7.75%
JCI Index:3,900
Bond yield (10yr):9.50%
USD/IDR:14,500
FX Outlook
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
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7 Sep'15 Spot Q1a Q2a Q3 Q4 Q1 Q2
EUR/USD 1.12 1.07 1.11 1.12 1.10 1.09 1.09 USD/JPY 119 120 123 121 123 124 124
GBP/USD 1.53 1.48 1.57 1.56 1.54 1.55 1.54
AUD/USD 0.69 0.76 0.77 0.70 0.70 0.70 0.69
USD/SGD 1.43 1.37 1.35 1.43 1.40 1.41 1.42
USD/CNY 6.37 6.20 6.20 6.40 6.42 6.47 6.55
USD/IDR
14,290 13,075 13,333 14,200 13,950 14,050 14,200 1
2015f 2016f
Indonesia macro economic indicator
7/24/2019 Indonesia Credit Outlook & Liquidity Condition (1).pdf
53/58
This document is issued by Global Markets PT. Bank Permata, Tbk. (PermataBank) for information and private circulation purpose only. It does not constitute any offer, proposal, recomm
into any transaction or adopt any hedging, trading or investment strategy, nor does it constitute any prediction of likely future movement in rates or prices or any representation that any
shown in any illustration. All reasonable care has been taken in preparing this document, no responsibility or liability is accepted for error, omissions, negligence, and/or inaccuracy of fact
projection and estimates are subject to change without notice. PermataBank and/or its members of Board of Director and Commissioners, employees, affiliates, agents and/or its advisors
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make your own independent judgment with respect to any matter contained herein, by fully aware of any consequences obtained on said judgment.
Macro Economic Indicator
Inflation (%YoY) 6.96 3.79 4.30 8.38 8.36 4.50
Exchange Rate Eop (Rp/US$) 8,991 9,068 9,670 12,189 12,440 13,950 1
Curent Account (% GDP) 0.72 0.20 -2.78 -3.18 -2.95 -2.30
Fiscal Balance (% GDP) -0.73 -1.14 -1.77 -2.23 -2.15 -2.30 Interest Rate
BI Rate (% p.a) 6.50 6.00 5.75 7.50 7.75 7.50
Time Deposit 3 month (% p.a) 7.06 6.81 5.76 7.61 8.94 8.25
Lending rate working capital (% p.a) 12.83 12.16 11.49 12.12 12.79 12.60
Growth (% YoY)
Credit 22.80 24.59 23.08 21.60 11.44 11.00
Deposit 18.54 19.07 15.81 13.60 12.17 13.50
NPL Commercial Banks (%) 2.50 2.17 1.87 1.77 2.20 2.70
Car Sales (1000 Units) 765 894 1,116 1,230 1,208 1,000
Car Sales Growth (%) 57.33 16.93 24.84 10.10 -1.78 -17.22
Motorcycle Sales (1000 Units) 7,373 8,013 7,064 7,745 7,867 6,300 6
Motorcycle Sales Growth (%) 25.99 8.67 -11.83 9.63 1.59 -19.92 Government Capex (Rp tn) 80.3 117.9 140.2 180.9 147.3 290.2 3
Unemployment Rate (%) 7.14 6.56 6.14 6.25 5.94 5.90
International Reserve (US$ bn) 96.2 110.1 112.8 99.4 111.9 101.0
GDP Growth (%) 6.22 6.49 6.26 5.78 5.02 4.75
Note : the red numbers are forecast
Source : PermataBank Economic Research
2015F 201Indicators 2010 2011 2012 2013 2014
Fiscal policy
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F I S C A L
Policy
Govt. set an ambitious tax revenue target.It is most likely not met.
2013 202014
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Source: Ministry of Finance and PermataBank Economic Research
2013
Growth To Growth
(%) September (%) S
REVENUES & GRANTS 1,529.7 1,635.4 6.9 1,081.3 66.1 1,761.6 7.7
Domestic Revenues 1,525.2 1,633.1 7.1 1,079.9 66.1 1,758.3 7.7 Tax 1,193.0 1,243.1 4.2 807.2 64.9 1,489.3 19.8
Domestic 1,134.3 1,189.8 4.9 773.0 65.0 1,440.0 21.0
Income Tax 584.9 569.9 -2.6 388.3 68.1 679.4 19.2
Oil and Gas 71.4 83.9 17.5 59.4 70.8 49.5 -41.0
Non Oil and Gas 513.5 486.0 -5.4 329.0 67.7 629.8 29.6
Value Added Tax 423.7 475.6 12.2 280.9 59.1 576.5 21.2
Others 125.7 144.4 14.9 103.8 71.9 184.1 27.5 International Trade Tax 58.7 56.3 -4.1 34.3 60.9 49.3 -12.4
Non-Tax 332.2 386.9 16.5 272.7 70.5 269.1 -30.4
Natural Resources 197.2 241.1 22.3 163.3 67.7 118.9 -50.7
Profit Transfers From SOE's 33.5 40.0 19.4 34.0 85.0 37.0 -7.5
Others 101.5 105.9 4.3 75.4 71.2 113.2 6.9
Grants 4.5 2.3 -48.9 1.4 60.9 3.3 43.5
20
APBN State
Budget
2014
State
Budget %
Massive increase in capital expenditurebut low realization.
2013 2014
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Source: Ministry of Finance and PermataBank Economic Research
2013
Growth To Growth
(%) September (%)
EXPENDITURE 1,683.0 1,876.9 11.5 1,234.7 65.8 1,984.1 5.7
Personnel 241.6 258.4 7.0 184.4 71.4 293.1 13.4
Material 200.7 195.2 -2.7 98.3 50.4 238.8 22.3Capital Expenditures 184.4 160.8 -12.8 59.8 37.2 275.8 71.5
Interest Payment 113.2 135.5 19.7 103.3 76.2 155.7 14.9
Interest of Domestic Debt 80.7 120.6 49.4 93.6 77.6 141.2 17.1
Interest of Foreign Debt 32.5 14.9 -54.2 9.7 65.1 14.5 -2.7
Subsidies 317.2 403.0 27.0 283.2 70.3 212.1 -47.4
Energy 274.7 350.3 27.5 254.7 72.7 137.8 -60.7
Fuel 0.0 246.5 183.4 74.4 64.7 -73.8
Electricity 0.0 103.8 71.4 68.8 73.1 -29.6Non Energy 42.5 52.7 24.0 28.5 54.1 74.3 41.0
Grant 3.6 2.9 -19.4 0.2 6.9 4.6 58.6
Social Assistance 73.6 96.7 31.4 62.8 64.9 107.7 11.4
Other 20.0 27.9 39.5 2.0 7.2 31.7 13.6
Transfer to regions 528.6 596.5 12.8 440.7 73.9 664.6 11.4
Village Fund 0.0 20.8
BALANCE -153.3 -241.5 -153.4 -222.5
2014
State
Budget
State
Budget % APBN
Massive increase in capital expenditurebut low realization.
2015 2016
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Source: Ministry of Finance and PermataBank Economic Research
Assum tions GDP Growth (%yoy)
Inflation (%yoy)
Exchange rate (Rp/USD)
Treasury Note 3m(%)
ICP (USD/barrel)
Oil lifting (kbpd)
Gas lifting (kboepd)
2015
Growth
(%)
REVENUES & GRANTS 1,761.6 1,822.5 3.5
Domestic Revenues 1,758.3 1,820.5 3.5
Tax 1,489.3 1,546.6 3.8
Domestic 1,440.0 1,506.5 4.6
Income Tax 679.4 757.2 11.5
Oil and Gas 49.5 41.4 -16.4Non Oil and Gas 629.8 715.8 13.7
Value Added Tax 576.5 571.7 -0.8
Others 184.1 177.6 -3.5
International Trade Tax 49.3 40.1 -18.7
Non-Tax 269.1 273.9 1.8
Natural Resources 118.9 124.9 5.0
Profit Transfers From SOE's 37.0 34.2 -7.6
Others 113.2 114.8 1.4
Grants 3.3 2.0 -39.4
EXPENDITURE 1,984.1 2,095.7 5.6
Central Government Expenditure 1,319.4 1,325.5 0.5
Ministerial 795.4 784.1 -1.4
Non-ministerial 524.0 541.4 3.3
Subsidies 212.1 182.6 -13.9
Energy 137.8 102.1 -25.9
Fuel 64.7 63.7 -1.5
Electricity 73.1 38.4 -47.5
Non Energy 74.3 80.5 8.3
Transfer to regions 664.6 770.2 15.9
Village Fund 20.8 47.0 126.0
FISCAL SURPLUS/DEFICIT -222.5 -273.2 22.8
As a percentage of GDP -1.90 -2.15
Revised Budget State Budget
2016
Six important government policies/responses
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Source: Bank Indonesia
Fuel SubsidyReform
Removepremiumsubsidy.Introducefixed subsidyfor solar
CreatedRp175tn offiscal space
StimulusPackage I
Deregulation Accelerating
strategicprojects
Boostingproperty
Village fund,Raskin,interestsubsidy
StimulusPackage II
Simplifyinvestmentpermits
Relax importregulation
Cut incometax forexporter(interest)
StimulusPackage III
Loweringenergy tariff
SimplifyingKUR facility
Shorten timerequired toprocessCultivationRights (HakGuna Usaha)
from 90 daysto 7 days andHGB from 50days to 30days.
StimulusPackage IV
Standardizedformula forminimumwage
Wider lendingcriteria forKUR
LPEI (LembagaPembiayaanEkspor Impor)
will havedifferentregulationfrom Bank.
StimulusPackage V
Assetrevaluation
Eliminatingdoubletaxation foinvestmentfunds engagin Real EstaProperty aInfrastructu
Deregulatioin ShariahBanking