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AUGUST 2018

INDONESIA’S RECENT
ECONOMIC UPDATES, PROSPECT
AND BANK INDONESIA’S POLICY MIX

DKEM DKMP DKSP


GLOBAL ECONOMY

DOMESTIC ECONOMY

OUTLINE
PROSPECT AND RISKS

BANK INDONESIA POLICY


GLOBAL ECONOMY
GLOBAL ECONOMY : UNEVEN GROWTH
BROAD BASED EXCHANGE RATE DEPRECIATION

US ECONOMIC POLICY UNCERTAINTY (EPU) DEPRECIATED OF CNY EXCHANGE RATE AND OTHER COUNTRIES
GLOBAL UNCERTAINTY REMAINS HIGH

DXY AND US 10 YR YIELD CAPITAL FLOWS OF EMERGING MARKET


COMMODITY PRICES GREW SLOWER

INDONESIA’S EXPORT COMMODITY PRICES INDEX (YOY) OIL PRICES


MONETARY POLICY BEGAN TO TIGHTEN

∆ ∆ ∆
INDONESIA’S ECONOMY REMAINS RESILIENT



DOMESTIC ECONOMY
DOMESTIC ECONOMY HAS ACCELERATED SIGNIFICANTLY

ECONOMIC GROWTH BY EXPENDITURE (%, YOY) ECONOMIC RECOVERY PATH (%, YOY)

5.7

GDP (GDP) 5.5

5.27
5.3

5.1
5.06
4.9

4.74 4.7

4.5
HOUSEHOLD CONSUMPTION RECORDED A HIGHER GROWTH

FARMERS TERMS OF TRADE AND REAL WAGE GROWTH CONSUMER CONFIDENCE INDEX
INVESTMENT REMAINED SOLID

CAPITAL GOODS IMPORT HEAVY EQUIPMENT SALES

Total Import Consumption Goods


Raw Materials Capital Goods Forestry
Construction
Agriculture

Mining
GROWING DOMESTIC DEMAND HAS PROMPTED A SURGE
OF IMPORTS

CONTRIBUTION OF OIL&GAS AND NON-OIL&GAS IMPORT NON-OIL AND GAS IMPORT (REAL VALUE)
EXPORT GROWTH INCREASED AS GLOBAL ECONOMY
RECOVERED

CONTRIBUTION OF OIL & GAS AND NON-OIL & GAS EXPORT NON-OIL & GAS EXPORT PRICES

Total Manufacture
Mining Agriculture
BROAD-BASED ECONOMIC GROWTH

≥ ≤ ≤ ≤ ≤
CURRENT ACCOUNT DEFICIT WIDENED

CURRENT ACCOUNT
CAPITAL AND FINANCIAL ACCOUNT POSTED HIGHER SURPLUS

CAPITAL AND FINANCIAL TRANSACTION


INDONESIA’S BALANCE OF PAYMENT IN Q2 2018
RECORDED DEFICIT

BALANCE OF PAYMENT
TRADE BALANCE DEFICIT IN LINE WITH ROBUST DOMESTIC
ECONOMY ACTIVITY

TRADE BALANCE
RESERVE ASSETS REMAINED HIGH

FOREIGN EXCHANGE RESERVES


EXCHANGE RATE VOLATILITY SUBSIDED AMID DEPRECIATORY
PRESSURES

MOVEMENT OF THE RUPIAH EXCHANGE RATES IN PEER COUNTRIES


INFLATION REMAINED UNDER CONTROL WITHIN THE TARGET
CORRIDOR 3.5±1%

Jul-18 mtm YoY Ytd


INFLATION
CPI 0.28 3.18 2.18
% yoy %, yoy
Core 0.41 2.87 1.78
16
Adm. Prices -0.68 2.11 1.33
14
Volatile Food 0.90 5.36 4.60
12
10
8
6
4
2
0
-2
CPI Core Volatile Foods Administered Prices
-4
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7
2015 2016 2017 2018
MANAGED INFLATION OBSERVED THROUGHOUT INDONESIA

REGIONAL INFLATION JULY 2018 (% YOY)


0,5
2,5

1,5

0
1
2
3
2002M01
2002M08
2003M03
2003M10
2004M05
2004M12

Normal-Stable
2005M07
2006M02
2006M09
2007M04
2007M11
2008M06

Normal-Alert
2009M01
2009M08
2010M03
2010M10
2011M05
2011M12
2012M07

Normal Standy
2013M02
2013M09
2014M04
2014M11
THE FINANCIAL SYSTEM STABILITY INDEX (ISSK)

Crisis
2015M06
2016M01
2016M08
2017M03

ISSK
2017M10
1.09

2018M05
THE BANKING SYSTEMIC RISK INDEX (IRSP)
FINANCIAL SYSTEM STABILITY HAS BEEN MAINTAINED
BANKING INTERMEDIATION CONTINUED TO ACCELERATE

CREDIT AND THIRD PARTY FUND (YOY %) CREDIT GROWTH BY SECTOR


MSMEs CREDIT GROWTH REMAINED HIGH

MSMEs CREDIT GROWTH (YOY)


BANKING CREDIT RISK IMPROVED

NONPERFORMING LOAN BY SECTOR RESTRUCTURING AND WRITE-OFF


BANKING CAPITAL IS RELATIVELY HIGH

BANKING INDUSTRY CAPITAL BANKING CAPITAL BY GROUP (BUKU)


BANKING LIQUIDITY REMAINED AT APPROPRIATE LEVEL

LIQUIDITY OF BANKING INDUSTRY


BANKING EFFICIENCY WAS ROA OF BANKING INDUSTRY
WELL-MAINTAINED, WHILE
PROFITABILITY REMAINED
STABLE

OE-OI OF BANKING INDUSTRY NIM AND BANKING INTEREST RATE


NON-FINANCIAL CORPORATIONS RECORDED POSITIVE
PERFORMANCE

PERFORMANCE OF NON-FINANCIAL CORPORATIONS

Data as of Q1-2017 & Q1-2018 (430 corporations); Source : Financial Repots in Indonesia Stock Exchange, Bloomberg, calculated
SHORT-TERM DEBT REPAYMENT CAPACITY OF NON-FCs
RELATIVELY IMPROVED

NON-FINANCIAL CORPORATIONS’ DSR NON-FINANCIAL CORPORATIONS’ ICR

Data as of Q1-2017 & Q1-2018 (430 Corporations); Source : Financial Reports in Indonesia Stock Exchange, Bloomberg, calculated
PAYMENT SYSTEM FOR LARGE VALUE AND RETAIL
TRANSACTIONS INCREASED

BI-RTGS TRANSACTION BI-SKNBI TRANSACTION


(DAILY AVERAGE) (DAILY AVERAGE)

*Exclude Monetary Operation Transaction


Source: Bank Indonesia
RETAIL TRANSACTIONS CONTINUE TO GROW

ATM-D TRANSACTION (DAILY AVERAGE)

CREDIT CARD TRANSACTION (DAILY AVERAGE) ELECTRONIC MONEY TRANSACTION


(DAILY AVERAGE)

Source: Bank Indonesia


CURRENCY IN CIRCULATION SEASONALY UPTURNED

CURRENCY IN CIRCULATION

Source: Bank Indonesia


PROSPECT AND RISKS
ECONOMIC RISKS

External Risks Domestic Risks


WIDEN DIVERGENCE IN GLOBAL ECONOMIC GROWTH
DOMESTIC ECONOMY PROSPECT

GDP Inflation CAD Credit Deposit

2018 5.0-5.4% 3.5±1% 2.5-3.0% GDP 10-12% 8-10%

2019 5.1-5.5% 3.5±1% 2.5-3.0% GDP


BANK INDONESIA POLICY
BI BOARD OF GOVERNORS (BOG) DECISION ON 14TH & 15TH AUGUST 2018

POLICY FOCUSES:
THANK YOU