australia indonesia business council · the australian economy is continuing its transition out of...
TRANSCRIPT
Australia Indonesia Business Council
January 2017Deloitte Access Economics, Australia Indonesia Business Council, January 2017
2© 2016 Deloitte Touche Tohmatsu. All rights reserved.
Overview
- Global Economy
- Australian Economy
- Indonesian Economy
- Trade Relationship
- Future of Australian and Indonesian trade
Deloitte Access Economics, Australia Indonesia Business Council, January 2017
3© 2016 Deloitte Touche Tohmatsu. All rights reserved.
The Global Economy
Deloitte Access Economics, Australia Indonesia Business Council, January 2017
4© 2016 Deloitte Touche Tohmatsu. All rights reserved.
0.02%
3.80%
5.50%
5.50%
16.60%
30%
0% 5% 10% 15% 20% 25% 30% 35%
Leicester City winning English Premier League
Election of Donald Trump
Cronulla Sharks winning National Rugby League
Western Bulldogs winning AFL Premiership
Chicago Cubs winning World Series
Brexit
Event and Probability 12 months before
A series of low probability events that analysts, economists and gamblers called incorrectly
2016 - the year of the black swan
Deloitte Access Economics, Australia Indonesia Business Council, January 2017
5© 2016 Deloitte Touche Tohmatsu. All rights reserved.
Commodity prices have been very strong this year…but it’s all a matter of perspective, we are still ~50% off the 2011 peak
0
50
100
150
200
1986 1991 1996 2001 2006 2011 2016
RBA Commodity Price Index2012 = 100
In USD Terms In AUD Terms
Commodity Prices
Source: RBA, Thomson Reuters, as of November
Deloitte Access Economics, Australia Indonesia Business Council, January 2017
6© 2016 Deloitte Touche Tohmatsu. All rights reserved. Deloitte Access Economics, Australia Indonesia Business Council, January 2017
Global economic growth is expected to further improve in 2017
2017 Outlook
• Continued robust growth in emerging Asia and India.
• China’s 2017 economic outlook expected to be 6.5%, state owned enterprises remain highly leveraged, posing a medium-term risk to growth.
• There has been some tightening of the labour market in the US, though uncertainty about Trump’s election –and how this will play out into the future – remains.
• Persistently low inflation means the EU and Japan will maintain accommodative monetary policy.
Source: The World Bank
2.4%
2.6%
2.4% 2.4%
2.7%
2.9%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
2013 2014 2015 2016 2017 2018
Real GDP Growth
Global Economy Forecast
7© 2016 Deloitte Touche Tohmatsu. All rights reserved.
The Australian Economy
Deloitte Access Economics, Australia Indonesia Business Council, January 2017
8© 2016 Deloitte Touche Tohmatsu. All rights reserved.
The Australian economy is continuing its transition out of the mining sector investment phase
The Australian Story
Deloitte Access Economics, Australia Indonesia Business Council, January 2017
• Continued decline in mining sector investment expected through 2017
• Increasing house prices continue to pose risks to the economy, however APRA and RBA polices are beginning to temper price growth
• Labour market indicators remain mixed, part-time employment has increased over the past year, and overall employment growth has slowed.
• Commodity prices have risen over the course of the year, providing some boosts to national income if rising prices are sustained.
9© 2016 Deloitte Touche Tohmatsu. All rights reserved.
Indonesian Economy
Deloitte Access Economics, Australia Indonesia Business Council, January 2017
10© 2016 Deloitte Touche Tohmatsu. All rights reserved.
Indonesia’s growth has been driven by growth in manufacturing and services and a relative decline in agriculture
The Indonesian Economy
Deloitte Access Economics, Australia Indonesia Business Council, January 2017
• From 1965 to 2016 the manufacturing and services share of GDP has increased whereas the agriculture share has fallen, consistent with Indonesia’s industrialization development
• Indonesia’s growth has been supported by increasing levels of consumer expenditure, driving sales in motor vehicles, electronic goods, consumer goods and food and demand for services (education, healthcare and financial)
Sectorial Shifts, 1965-2014
0
10
20
30
40
50
60
Agriculture Industry Services1965 2014
%Change
Source: World Bank
11© 2016 Deloitte Touche Tohmatsu. All rights reserved.
Future role for Indonesia’s coalGlobal coal demand expected to grow by ~25% by 2040 as the world continues to industrialise, especially in India and other Asian nations
Energy demand and GDP per personGlobal Coal Demand
Source: IEADeloitte Access Economics, Australia Indonesia Business Council, January 2017
12© 2016 Deloitte Touche Tohmatsu. All rights reserved.
Role for coalIndia’s industrialisation will be supported by coal use, Indonesian supply will compete with domestic Indian supply
India Energy InvestmentsGlobal Energy Demand
Source: IEADeloitte Access Economics, Australia Indonesia Business Council, January 2017
13© 2016 Deloitte Touche Tohmatsu. All rights reserved.
Australian and Indonesian Trade Relationship
Deloitte Access Economics, Australia Indonesia Business Council, January 2017
14© 2016 Deloitte Touche Tohmatsu. All rights reserved.
Indonesia is currently Australia’s twelfth largest trading partner
Trade relationship between Australia and Indonesia
Deloitte Access Economics, Australia Indonesia Business Council, January 2017
8,401
1,406
0 5,000 10,000
Australia's Investment inIndonesia
Indonesia's Investment in
Australia
Australia's investment relationship
with Indonesia, 2015-2016 (A$m)
• There are over 470 registered Australian businesses operating in Indonesia.
• Two way investment between Australia and Indonesia was valued at $A9.8bn in 2015.
• Two way trade in goods and services was valued at $A15bn in 2015, down from $A15.7bn (-5%) in 2014.
15© 2016 Deloitte Touche Tohmatsu. All rights reserved.
Breakdown of major exports and imports
Trade relationship between Australia and Indonesia
Deloitte Access Economics, Australia Indonesia Business Council, January 2017
1,127
619
586
461
353
247
0 200 400 600 800 1,000 1,200
Wheat
Education-related travel
Live animals (excluding seafood)
Sugars, molasses and honey
Crude Petroleum
Tourism
A$m
Australia’s Major Exports to Indonesia 2015-2016
2200
1,271
736
223
206
203
0 500 1000 1500 2000 2500
Tourism
Crude Petroleum
Specialised machinery and parts
Transport
Wood, simply worked
Gold
A$m
Australia’s Major Imports from Indonesia 2015-2016
• Wheat remained Australia’s leading exported good and education-related travel remained Australia’s leading exported service in 2015-2016, unchanged from 2014-2015.
• Crude petroleum exports more than doubled to $A353mn between 2013-2014 and 2015-2016, overtaking a range of other exports including beef, dairy products, aluminum and coal.
• Tourism remained Australia’s major imported service and oil remained Australia’s major imported good in 2015-2016, unchanged from 2014-2015.
• Gold imports increased from 2013-2014 to 2015-2016, overtaking a range of other imports including copper, iron, steel and aluminiumstructures.
16© 2016 Deloitte Touche Tohmatsu. All rights reserved.
Future of Australian-Indonesian Trade Relationship
Deloitte Access Economics, Australia Indonesia Business Council, January 2017
17© 2016 Deloitte Touche Tohmatsu. All rights reserved.
There is considerable scope for Australia to expand its trade, investment and economic cooperation with Indonesia
Future direction of Australian-Indonesian Trade Relationship
Deloitte Access Economics, Australia Indonesia Business Council, January 2017
Growth Areas -
Indonesia
Healthcare
Premium food and
beverages
Infrastructure development
Agribusiness (grains and
meat)
Education and Tourism
Financial and ICT Services
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/au/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
The entity named herein is a legally separate and independent entity. In providing this document, the author only acts in thenamed capacity and does not act in any other capacity. Nothing in this document, nor any related attachments or communications or services, have any capacity to bind any other entity under the ‘Deloitte’ network of member firms (including those operating in Australia).
About Deloitte
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte's approximately 200,000 professionals are committed to becoming the standard of excellence.
About Deloitte Australia
In Australia, the member firm is the Australian partnership of Deloitte Touche Tohmatsu. As one of Australia’s leading professional services firms. Deloitte Touche Tohmatsu and its affiliates provide audit, tax, consulting, and financial advisory services through approximately 6000 people across the country. Focused on the creation of value and growth, and known as an employer of choice for innovative human resources programs, we are dedicated to helping our clients and our people excel. For more information, please visit our web site at www.deloitte.com.au.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
© 2016 Deloitte Touche Tohmatsu
This proposal is not intended to be a binding offer or to give rise to a binding contract with us. If you want to accept our proposal please let us know and we will provide you with an engagement letter which will be the basis of the contract between us for the proposed services.
Deloitte Access Economics, Australia Indonesia Business Council, January 2017