If your mental map of the global economy puts emerging markets on the periphery and developed markets at the core, then developments in the global travel industry are set to turn you inside out.
By 2023, according to a new study by Oxford Economics, the “emerging” world will dominate global air traffic, accounting for 51 per cent of total traffic, up from 44 per cent in 2013 (see chart). The main drivers of this trend will be a rapid upsurge in international travellers from China, Russia, Brazil, India and Indonesia who spend at a quicker pace than developed world counterparts. Continue reading »
While Joko Widodo, the wildly popular governor of Jakarta, just about managed to restrain his euphoria when he was finally named as his party’s presidential candidate on Friday, investors were not so coy.
The Jakarta stock exchange jumped by three percent on Friday, its biggest one-day gain for six months, to reach a nine-month high, while the once-troubled rupiah has strengthened by 1.3 per cent against the US dollar since then. Continue reading »
Indonesian GDP came in higher than expected in Q4, up 5.7 per cent year-on-year in the quarter, above the average forecast of 5.3 per cent, as improving exports reduced the impact of slowing growth in domestic consumption and investment.
The full FT story is here. Beyondbrics presents a rundown of the analysts’ viewpoints (with our emphasis in bold). Continue reading »
While speculation about the US Federal Reserve’s plans to curb its quantitative easing programme drags on, Indonesia’s currency continues to “taper” of its own volition.
On Thursday, the dollar rose to over 12,000 rupiah for the first time since 2009. Confidence in Indonesia’s currency is weak because of the country’s large current account deficit and slowing economic growth, which is at a four-year low. Continue reading »
Nothing lasts forever, not even the Federal Reserves’ QE programme. And when it ends, emerging markets will have a new normal to contend with. Time to get ready.
Indonesia is hoping robust investment and the completion of much-delayed infrastructure projects will enable it to contend with the new “basic economic parameters” that will be required once the Fed starts tapering its asset purchases, the country’s vice-president (pictured above) said in an interview on Thursday. Continue reading »
Indonesia’s central bank held its policy interest rate unchanged on Tuesday, ending an aggressive tightening cycle that saw the rate rise from 5.75 per cent a year in May to 7.25 per cent at the bank’s previous policy meeting last month.
The decision was widely expected: 17 out of 18 economists surveyed by Bloomberg predicted no change. But was the decision the right one? Several analysts say Bank Indonesia has left the job unfinished. Continue reading »
The World Bank has followed the International Monetary Fund’s lead by slashing its economic growth forecasts for Indonesia and urging the country to carry out “deep reforms” if it is to avoid a prolonged slump.
Just three months since it last updated its predictions, the development lender cuts its GDP projection for this year from 5.9 per cent to 5.6 per cent and for next year from 6.2 per cent to 5.3 per cent. Continue reading »
After several months in the eye of the global emerging markets storm, Indonesia received some respite on Tuesday when it reported an unexpected trade surplus and a slowdown in the inflation rate.
Annual consumer price inflation fell to 8.4 per cent in September from 8.8 per cent (a four-year high) in August, while Indonesia reported a positive trade balance of $132m for August in contrast to July’s record $2.3bn deficit. Continue reading »
It took two years of vacillation before Indonesia’s cautious president, Susilo Bambang Yudhoyono, finally hiked government-administered fuel prices in June.
Now, just three months later, the prickly political issue of Indonesia’s ballooning fuel subsidy bill is back on the agenda after the slide in the value of the rupiah, the world’s worst-performing major currency since May, led to a spike in the price of petrol imports. Continue reading »
Indonesian growth has slowed, according to the GDP data out on Friday. Growth for the second quarter of 2013 was 5.8 per cent, the first sub-6 reading since Q3 2010.
How worried should we be? Continue reading »
Ben Bernanke may not have begun “tapering” quantitative easing just yet but that has not stopped investors in Indonesia from piling out of what was previously one of the world’s hottest emerging markets.
After sitting on the sidelines for much of the last year despite growing concerns about overheating, Indonesia’s central bank has been driven into action by a rise in outflows over the last few months. Continue reading »
After months of warnings from some economists about the need to increase interest rates, Indonesia’s central bank reacted only when the exchange rate fell below Rp10,000 to the dollar on Monday for the first time since 2009.
Central bankers and government officials seem to believe that Rp10,000 is an important psychological barrier, which must not be breached if confidence in the currency is to be maintained. Continue reading »
While China’s manufacturing indices have been rather depressing of late, Indonesia’s numbers are much healthier.
The PMI score came out at 51.7 in April – up from March, a six-month high, and the second highest in the last few years. So, all good? Continue reading »
Reverse the recent protectionist trend, invest more in infrastructure, improve the quality of policy-making, cut energy subsidies. Even the World Bank admits that it’s starting to sound like a broken record in Indonesia, according to Jim Brumby, its lead country economist.
But, while concerns about complacency undermining Indonesia’s economic boom are not new, the World Bank believes the risks to growth are getting greater. Continue reading »