Toward end of the first two months of 2013, the economic and monetary
development at home was notably favorable. To refer to outcome of meeting of
the Board of Governors of Bank Indonesia [RDG] of February 12, 2013 which
decided to maintain BI rate at 5.75% it could be one of the main catalysts.
According to Bank Indonesia, the BI rate level was rated as synchronous
with inflation pressures in accordance with inflation target of 2013 and 2014 at
4.5% + 1%. Bank Indonesia rated that Indonesia’s economy was still showing good
performance although still cautious about high pressures from external
imbalance as indicated by high import amidst global economic weakening.
In the future, BI would continue to exercise policy mix to enhance
external balance so deficit of current transaction could be maintained at
tolerable level. Bank Indonesia would also safeguard Rupiah exchange rate value
to be in accordance with fundamental economy whereby to create a well balanced
forex market. The effort was related to weakening of Rupiah value against USD
in the past one year.
In January 2013, Rupiah weakened by 0.22% on the average [m t m] to the
level of Rp9,654 per USD with stable volatility. In the future, BI would
safeguard stability of Rupiah value in Parallel with fundamental economy.
Besides, BI would also enhance fixing rate of Rupiah value at the domestic
spotmarket. This reference was expected to increase liquidity and efficiency of
the forex market which deepened the domestic moneymarket.
Besides BI would also foster policy coordination with the Government in
managing domestic demand in the effort of safeguarding stability of macro
economy and ensure sustainability of national economy. The collaboration was
aimed at controlling inflation to keep it as low as below 5%.
Inflation by Consumers Price Index [IHK] increased in January 2013 but
was predictably under control at reasonable level. Inflation of IHK in January
was posted at 1.03% [m t m] or 4.57% [y o y] due to heavy rainfall which
disturbed production and distribution. Interrupted supply increased prices of
vocative food which was notably high compared to the past period. Meanwhile
core inflation was still stable at 4.32% y o y supported by controlled
inflation, well managed demand which corresponded with production capacity, and
safeguarded Rupiah value.
In the future, there would be some risk factor to be observed which
would heighten inflation pressures, among others the weather factor which might
disturb production and distribution of food and increase of some administered
prices.
Other main indicators were Indonesia’s economy which managed to grow
notably by support of the domestic demand although slightly slowing down
compared to the past period. Economic growth over quarter IV 6.11%, whilst for
the entire year 2012 the growth percentage was 6.23%. Admittedly still below
the expected 6.3% - 6.7% but still gratifying because it was somehow still
above 6%.
As in the previous quarters, consumption and investment in quarter
IV-2012 was still growing well, in spite of being slightly moderated compared
to the previous quarter. On the other hand export was getting better in line
with bettered economy in some main trading counterparts like China. However,
import growth was still high in line with high domestic demand.
Furthermore in quarter I-2013 economic growth was estimated to reach
6.2% - 6.3% especially supported by domestic demand which was still strong. For
the entire 2013, after considering economic activities in quarter III and
IV-2013 including expenditures for preparation for the general Election,
economic growth was predicted to be 6.2% - 6.3%, a moderate projection figure.
On the external side, Indonesia’s balance of payment [NPI] in quarter
IV-2012 bettered as indicated by increased surplus although deficit in current
transaction was higher that initial estimate. Improved NPI was due to
performance of capital and financial transaction supported by market liquidity
and global moneymarket.
Meanwhile increased deficit in current transaction was due lessened
surplus of trade balance of non oil-gas and increased deficit of oil-gas trade
balance. In the future, current transaction of quarte I-2013 was estimated to
have correction, especially due to improved export performance to trading
counterpart countries like China, the USA, Japan and South Korea.
One noteworthy thing was the position of forex reserves by end of
January 2013 had come to USD 108.78 or equal 5.9 months of export and
Government’s debt payment above the international standard of adequacy. This
position was a downturn of USD 4 billion by end of 2012 which was posted at USD
112.7 billion.
Generally speaking the condition of monetary stability and intermediary
function was well maintained. Performance of banking industry which was solid
as reflected in the Capital Adequacy Ration [CAR] which was way below the
minimum 8% and well managed Non Performing Loan [NPL] gross below 5%.
Meanwhile credit growth by end of December 2012 came to 23.1% [y o y],
an increase of 22.3% [y o y] against the previous month. Credit for Working
Capital [KMK] grew notably high at 23.2% while investment in credit consumption
[KI] grew stable at high level of 27.4% [y o y] and was expected to increase
national economic capacity. Meanwhile consumption credit [KK] grew by 20.0% [y
o y ].
For the future BI believe that stability of the financial system would
remain safeguarded with improve bank’s intermediary function in line with
bettered performance of national economy. Intermediary function would still
move up with credit growth around 23%-25% in order to support economic target
growth of 6.3%-6.8%. Hopefully this intermediation would still move up higher
that consumptive credit to bring wide multiplier effect.
Financing for the infra-structure sector of the medium-large scale was
estimated to expand especially to support the Masteplan of Indonesian Economic
Development Expansion [MP3EI] all over the country.
The commitment of direct investment from the domestic [PMDN] or foreign
[PMA] which was projected to break through Rp 350 trillion would jack up
activities of the real sector. In this case socio-political stability and legal
certainty was expected to be realized as incentive for marketplayers to develop
their business. (SS)
Business News - February 22,2013
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