Fears over rising cost pressures

16 01 2008

In the October-November survey, the Business Sentiment Index (BSI) dropped by 9.4 percent to 122.6, snapping its upward streak in the last seven surveys. Both components of the BSI showed declines: the component measuring sentiment toward current situations, the Present Situations Index (PSI), dropping 8.8 percent and the component of the BSI measuring expectations over the next six months, the Expectations Index (EI), retreating 9.9 percent to 129.0.

CEOs still maintain that both business and corporate conditions are good: these two indices may have posted declines, yet they are still way above the 100 level. It is rather in regard to the current state of the overall economy where CEOs have the most concerns – the 15.3 percent fall in this index to just 80.5 brings it to a low not seen since the beginning of 2007. The seasonal holiday period reduced economic activity while rising energy prices – especially for oil and coal – are increasing costs for many businesses. Yet as the economy should quickly pick up following the Idul Fitri holidays, the CEO pessimism appears to be overdone. Read the rest of this entry »

Weekly Currency 14 Jan 2008

15 01 2008

Nilai tukar Yen tidak banyak mengalami perubahan terhadap USD dalam perdagangan minggu kemarin. Pada hari pertama perdagangan, Yen ditutup sedikit melemah pada level 109.2 dari level 108.6 pada penutupan hari Jumat minggu sebelumnya (4 Januari 2008). Pada hari perdagangan selanjutnya, Yen berfluktuasi hingga akhirnya ditutup pada level 108.9 di hari Jumat yang lalu (11 Januari 2008). Secara keseluruhan, Yen hanya melemah sebesar 0.2% dibandingkan penutupan minggu sebelumnya.

Yen tidak banyak berubah pada perdagngan minggu lalu dikarena terdapat sentimen negatif dan sentimen positif terhadap Yen pekan kemarin. Sentimen negatif muncul setelah gubernur Bank Sentral Jepang (BOJ), Toshihiko Fukui, diperkirakan akan memberi sinyal kepada pelaku pasar bahwa BOJ akan tetap mempertahankan suku bunga pada level saat ini, yaitu sebesar 0.5%. Hal ini membuat Jepang tetap sebagai negara dengan suku bunga terendah dibandingkan dengan negara-negara industri besar lainnya. Selain itu, investor Jepang juga banyak melakukan pembelian aset berdenominasi mata uang asing dengan imbal hasil besar ( high yield ), sehingga aktifitas carry trade meningkat. Sementara itu, sentimen positif terhadap Yen muncul setelah harga-harga saham di Asia mengalami penurunan akhir minggu lalu sehingga menimbulkan kekhawatiran di antara para investor yang memegang aset dengan imbal hasil tinggi (high yield ). Karena itu mereka mulai mengurangi aktifitas carry trade tersebut. Read the rest of this entry »

Faster Growth Despite Rising External Risks

15 01 2008

indonesia economic forecast 2008

GDP: Accelerating Since the Beginning of the Year

The Indonesian economy picked up its growth pace in 2007. From a growth pace of 6.0 percent in Q1 2007, the economy then expanded by 6.3 percent in Q2 2007 and 6.5 percent in Q3 2007. Nonetheless, in Q4 2007, we expect the Indonesian economy to show slightly slower growth of 6.2 percent as a result of slightly lower-than expected growth in government expenditures and private consumption in that particular quarter. Yet for the whole of 2007, the Indonesian economy is expected to grow by 6.3 percent, or much faster than the 5.5 percent growth pace in 2006.

Compared to other countries in the region, Indonesia is one of the fastest growing economies. Among the “emerging market” countries in Asia, the Indonesian economy ranked fourth in terms of growth over the last three quarters (up to the third quarter of 2007), with only the economies of China, India, and the Philippines growing more briskly than Indonesia’s economy.

Investment has helped drive the Indonesian economy over the last three quarters. Prior to 2006, investment (as measured by gross fixed capital formation) gave only a minimal contribution to economic growth. However, it then picked up significantly in 2007. Looking ahead, investment growth should remain strong. This is because spare capacity has been reduced significantly following the steady rise in domestic consumption since the beginning of this decade. Read the rest of this entry »

January 2008 Inflation Outlook: Unstable Rice Prices!

9 01 2008

indonesia flood

In December 2007, the consumer price index (CPI) shot up 1.10% MoM (month-on-month), after a 0.18% MoM rise in November. As such, the YoY (year-on-year) inflation rate fell slightly from 6.71% in November to 6.59% in December.

Prices rose in all components of the CPI. The largest increase was seen in the Foodstuffs component (up 2.47% MoM), followed by the clothing component (up 0.99% MoM), the housing component (up by 0.63% MoM), the processed foods component (up 0.91%), the medical care component (up 0.41% MoM), the transportation component (up 0.22% MoM), and the education component (up 0.12% MoM).

The December inflation figure was higher than we had expected. We knew that seasonality factors (Christmas and New Year) would push up the price of rice in December. Nonetheless, we did not expect foodstuff prices (especially rice prices) to increase as sharply as they did. In the previous year, the price of rice climbed higher due to the long dry season that delayed rice planting and led to rumors of rice scarcity. Also, the government agency responsible for maintaining the sustainability of the rice supply (Bulog) was apparently ill prepared to deal with the problem. Furthermore, rice imports could not be conducted in a timely manner due to the lengthy debate over whether such a policy would hurt the country’s rice farmers. Read the rest of this entry »

Weekly Currency 7 Januari 2008

8 01 2008

Nilai tukar Yen menguat terhadap USD dalam perdagangan minggu kemarin. Pada hari pertama perdagangan, Yen ditutup menguat pada level 111.7 dari level 112.3 pada penutupan hari Jumat minggu sebelumnya (28 Desember 2007). Pada hari perdagangan selanjutnya, Yen terus menguat hingga akhirnya ditutup pada level 108.6 di hari Jumat yang lalu (4 Januari 2008). Secara keseluruhan, Yen menguat sebesar 3.3% dibandingkan penutupan minggu sebelumnya.

Euro tidak banyak berubah terhadap Dolar Amerika dalam perdagangan minggu kemarin. Pada hari pertama perdagangan, Euro ditutup melemah pada level 1.459 dari level 1.472 pada hari Jumat minggu sebelumnya (28 Desember 2007). Namun pada perdagangan selanjutnya, Euro kembali menguat. Sehingga pada akhir perdagangan pekan kemarin, Euro ditutup pada level 1.474 pada hari Jumat kemarin. Secara keseluruhan, Euro hanya menguat sebesar 0.1% dari penutupan minggu sebelumnya.

Dalam perdagangan minggu kemarin, nilai tukar Rupiah melemah terhadap USD. Pada hari pertama perdagangan, Rupiah ditutup pada level 9,400 dari level 9,395 pada hari Jumat minggu sebelumnya (28 Desember 2007). Pada hari-hari perdagangan berikutnya, Rupiah relatif stabil. Namun pada akhir perdangangan minggu lalu, Rupiah melemah tajam dan ditutup pada level 9,460 pada Jumat kemarin. Secara keseluruhan, Rupiah melemah sebesar 0.6% dari penutupan minggu sebelumnya. Weekly Currency 7 Januari 2008