INDONESIAINDONESIA::EECONOMIC OUTLOOK 20CONOMIC OUTLOOK 2010-1110-11

Faisal Basri 29 Juli 201029 Juli 2010

Part IPart IThe World EconomyThe World Economy

The world economic outlook, 2009-2011The world economic outlook, 2009-2011

Description 2009 2010* 2011*World GDP growth, % -0.6 4.2 4.3

-United States -2.4 3.1 2.6

-Euro Area -4.1 1.0 1.5

-Japan -5.2 1.9 2.0

-Developing economies 2.4 6.3 6.5

-China 8.7 10.0 9.9

-India 5.7 8.8 8.4

-Asean-5 1.7 5.4 5.6

World trade growth, % -10.7 7.0 6.1* ProjectionSources: IMF, World Economic Outlook, April 2010

Leading economic indocators kian membaikLeading economic indocators kian membaik

Oil prices Oil prices have roughly doubled since Feb.have roughly doubled since Feb.Crude Oil Lt Sweet Pit (Nymex) August 2010

Source: http://online.wsj.com/mdc/public/page/mdc_commodities.html

Adjusted by producer-price index = US$118Adjusted by annual income within G-7 countries = US$134Adjusted by disposable income of US = US$145Spending on oil as a share of global output = US$150• Source: Economist, April 17, 2008.

03:58 p.m EDT

US$76.81 =

Oil prices and stock marketOil prices and stock market

Source: http://online.wsj.com/mdc/public/page/mdc_commodities.html

= 10,497.88

Oil prices and gold (Dec., Comex)Oil prices and gold (Dec., Comex)

Source: http://online.wsj.com/mdc/public/page/mdc_commodities.html

= $1165.9

The “financialization” of commodities has led to greater financial investor interest

Remarks by John Lipsky (IMF) At the 4th OPEC International SeminarVienna, March 18, 2009 (http://www.imf.org/external/np/speeches/2009/pdf/031809.pdf)

Now … governments are the problemsNow … governments are the problemsMaastricht Treaty: - Budget deficit < 3% of GDP - Debt/GDP ratio < 60%

Bagian IIBagian IIPerekonomian IndonesiaPerekonomian Indonesia

Economic temperature Economic temperature coolercooler .. ..

02468

1012141618

perc

ent

2003 2004

4.6

Source: BPS.

2005

Inflation returns 1 digit, y-o-y, %Target BI: 5% + 1%

18.4

2006

14.6

2007

2008

2009

5.0

2010

Inflation remains high in the regionInflation remains high in the region

Source: World Bnak, September 2009

August inflation, y.o.y

BI Rate BI Rate bertahan di 6.5 persenbertahan di 6.5 persen

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

(BI Rate, percent)

Source: Bank Indonesia.

Sampai akhir tahun berpotensi menuju 7%

Money market rates vs. BI rateMoney market rates vs. BI rate

Anomali ….Anomali ….

Level of credits to GDP, 2009Level of credits to GDP, 2009

Perbandingan sektor keuangan di Asia-pasifikPerbandingan sektor keuangan di Asia-pasifik

Belanja pemerintah masih seret

0

50

100

150

200

250

2003 2004 2005 2006 2007 2008 2009

0

2

4

6

8

10

12

14Rekening Pemerintah di BI

Inter Bank Rate

BI Rate

percentRp Trn

Dana yang ditarik pemerintah (pajak, SUN, ORI, Sukuk) parkir dalam rekening pemerintah di BI. Belanja APBN yang tersendat (a.l. karena eskalasi biaya proyek) juga berdampak negatif terhadap likuiditas.

Source: Diolah oleh Danareksa Research Institute.

Heart beat has been Heart beat has been appreciating ...appreciating ...

8,500

9,000

9,500

10,000

10,500

11,000

11,500

12,000

12,500

8-A

pr

2-A

ug

4-N

ov

15-F

eb

23-M

ay

24-A

ug

1-D

ec

6-M

ar

12-J

un

14-S

ep

22-D

ec

29-M

ar

4-Ju

l

4-O

ct

24-J

an

30-A

pr

4-A

ug

11-N

ov

Feb

-19

May

-28

Sep

-01

8-D

ec

17-M

ar

21-J

un

Source: Bank Indonesia

(Rupiah per US$)

Foreign reserves Foreign reserves increasedincreased more than more than $$77 bil. bil.

30000.00

35000.00

40000.00

45000.00

50000.00

55000.00

60000.00

65000.00

70000.00

75000.00

80000.00

W1-

JaW

2-Fe

W3-

Ma

W4-

Ap

W1-

JnW

2-Jl

W3-

Ag

W4-

Sep

W1-

Nov

W2-

Dec

W3-

Jan

W4-

Feb

W1-

Apr

W2-

May

W3-

Jun

W4-

Jul

W1-

Sep

W2-

Oct

W3-

Nov

W4-

Dec

W2-

Apr

31-A

ug31

-Jan

29-J

un31

-Aug

5-O

ct15

-Nov

19-D

ec31

-Jan

6-M

ar15

-Apr

23-M

ay30

-Jun

7-A

ug15

-Sep

24-O

ctFe

b-27

Jul-3

130

-Dec

31-M

ay

Source: Bank Indonesia.

(US$ million)

Foreign ownership in bonds and SBIsForeign ownership in bonds and SBIs

Source: Bank Indonesia and MoF.

Balance of paymentsBalance of payments (US$ million) (US$ million)

Source: Bank Indonesia.

2008 2009 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10

I. CURRENT ACCOUNT 126 10,746 2,508 2,480 2,157 3,602 1,554

A. Goods, net (Trade Balance) 22,916 35,133 6,884 8,365 8,488 11,395 7,930

1. Exports, f.o .b. 139,606 119,480 24,179 28,130 31,273 35,899 34,292

2. Imports, f.o.b. -116,690 -84,347 -17,295 -19,765 -22,784 -24,504 -26,362

B. Services, net -12,998 -14,108 -2,743 -3,310 -3,509 -4,546 -3,572

C. Income, net -15,155 -15,140 -2,742 -3,776 -4,072 -4,551 -3,965

D. Current Transfers, net 5,364 4,861 1,109 1,201 1,248 1,303 1,160

II. CAPITAL & FINANCIAL ACCOUNT -1,832 3,548 1,593 -1,822 2,507 1,270 4,297

A. Capital Account 294 96 19 29 34 14 18

B. Financial Account -2,126 3,453 1,574 -1,851 2,474 1,255 4,279

1. Direct investment 3,419 1,928 453 400 472 604 1,939

2. Portfolio investment 1,764 10,336 1,950 1,893 2,972 3,521 6,218

3. Other investment -7,309 -8,812 -829 -4,144 -970 -2,869 -3,877

III. ERRORS & OMISSIONS -238 -1,788 -146 394 -1,118 -918 770

I V. RESERVES &RELATED ITEMS 1,945 -12,506 -3,955 -1,052 -3,546 -3,954 -6,621

Indonesia’s post-crisis journeyIndonesia’s post-crisis journey

-21

-19

-17

-15

-13

-11

-9

-7

-5

-3

-1

1

3

5

7

Source: BPS.

6.6

Quarterly GDP growth, y-o-y, %

Crisis peak

Gus Dur: “Erratic/shaky”

Megawati: Consolidation and

acceleration

SBY: Throws awayMomentum, and then made

correction

4.2

6.4

5.7

5.4

Pertumbuhan semester II sekitar 6.5%, sehingga rata-rata tahun ini sekitar 6.3%

Low quality — Sectoral growth rateLow quality — Sectoral growth rate(2000 base year, year-on-year growth rate, %)(2000 base year, year-on-year growth rate, %)

2008 2009 Q3-09 Q4-09 Q1-10 Q1-10 share

Tradable 3.4 2.2 2.9 4.5 2.4 52.6

Agriculture 4.8 4.1 3.3 4.6 2.9 16.0

Mining & Quarrying 0.5 4.4 6.2 5.2 3.5 11.2

Manufacturing 3.7 2.1 1.3 4.2 3.6 25.4

Non-Tradable 8.7 7.1 5.6 6.4 9.4 47.4

Electricity, Gas & Water 10.9 13.8 14.5 14.0 7.2 0.8

Construction 7.3 7.1 7.7 8.0 7.3 10.0

Trade, Hotel & Rest. 7.2 1.1 -0.2 4.2 9.3 13.9

Transport & Comm. 16.7 15.5 16.4 12.2 11.9 6.2

Finance 8.2 5.0 4.9 3.8 5.5 7.2

Services 6.4 6.4 4.2 5.7 4.6 9.3

GDP 6.1 4.5 4.2 5.4 5.7 100.0 Source: BPS.

Low quality growth, 2000-200Low quality growth, 2000-2009*9* (%) (%)

0

2

4

6

8

10

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: BPS.

Non-tradable

GDP

Tradable

GDP growth by expenditure (y-o-y, %)GDP growth by expenditure (y-o-y, %)

* First quarterSource: BPS..

Description 2007 2008 2009 2010*

Private consumption 5,0 5,3 4.9 3.9

Government consumption 3,9 10,4 15.7 -8.8

Fixed investment 9,4 11,7 3.3 7.9

Domestic demand 6,0 7,4

Exports 8,5 9,5 -9.7 19.6

Imports 9,0 10,0 -15.0 22.6

GDP 6,3 6.1 4.5 5.7

Foreign merchandise tradeForeign merchandise trade

     

  2007 2008 2009 2010* 2007 2008 2009 2010*

Total export 114.1 137.0 103.1 60.1 13.1 20.0 -15.0 47.7

Non-oil and gas 92.0 107.9 86.6 48.9 15.5 17.3 -9.7 39.9

Oil and gas 22.1 29.1 16.5 11.2 4.1 31.7 -34.7 95.1

Total import 74.5 129.2 96.8 51.2 21.9 41.1 -25.0 53.3

Non-oil and gas 52.5 98.6 77.9 40.5 24.8 42.4 -21.1 47.3

Oil and gas 21.9 30.6 19.0 10.8 15.5 38.0 -37.8 80.8

Surplus (Deficit) 39.6 7.8 16.5 8.9

Non-oil and gas 39.5 9.3 16.9 8.4

Oil and gas 0.2 (1.5) (0.4) 0.4

Billion US$ Growth (yoy)Description

Ekspor total maupun nonmigas mulai naik sejak Juni 2009 (m-to-m)

* January-MaySource: BPS.

Foreign merchandise trade: monthlyForeign merchandise trade: monthly

Composition of imports (%, Jan-May 2010)Composition of imports (%, Jan-May 2010)

Trade balance Indonesia-China (non-oil & gas)

2008 2009 2010*Exports 7,787 8,906 5,024Imports 14,948 13,497 7,134Trade Balance -7,161 -4,591 -2,110% of Total Exports 7.2 9.1 10.3Imports 15.2 17.3 17.6Rank Exports 4 3 3Imports 1 1 1*January-AprilSources: BPS

US$ million

Indonesia: foreign visitors arrivals

Sources: BPS

400000

450000

500000

550000

600000

650000

700000

Jan

Feb

Mar

Apr

May Jun Jul

Aug Se

pO

ctN

ov Dec Jan

Feb

Mar

Apr

May Jun Jul

Aug Se

pO

ctN

ov Dec Jan

Feb

Mar

Apr

May

Visitors:2008 = 6,234,4972009 = 6,323,7302010 (Jan-May) = 2,767,122

Growth:Dec 2009 (m-t-m) = 17.63%Jan-Dec 2009 (y-o-y) = 1.43%Jan-May 2010 (y-o-y) = 14.6%

2008 2009 2010

Indeks tendensi konsumen

90

100

110

Source: BPS.

Indeks tendensi bisnis

90

100

110

120

Source: BPS.

Bagian IIIBagian IIIPeluang dan TantanganPeluang dan Tantangan

Pemerintahan BaruPemerintahan Baru

Red shirts make bloody protest

MARCH 2010: Supporters of former premier Thaksin Shinawatra hold canisters with human blood before pouring it outside the Government house in Bangkok. http://www.stuff.co.nz/world/asia/3461303/Thai-protesters-pour-blood

Protestors burn churches in Malaysia

In God's name?A combustible mixture of race, religion and politics http://www.economist.com/world/asia/displaystory.cfm?story_id=15271154

January 2010

Menuju keseimbangan politik baru?

Perubahan dalam koalisi yang disertai dengan perombakan kabinet.

“Disiplin” koalisi: sehingga akan lebih lugas antara partai-partai koalisi dan partai-partai oposisi.

Pengungkapan borok-borok masa lalu: positif untuk pembersihan?

Faktor-faktor pengerem

Para ketua umum partai punya agenda tersendiri untuk hadapi 2014.

Tarik-menarik di posisi-posisi strategis, termasuk di BUMN.

Kekompakan kabinet terganggu.

Kompromi-kompromi politik

Agenda populisme mengedepan.

Agak sulit mengharapkan perubahan drastik.

Bagian IVBagian IVProspek 2010-14Prospek 2010-14

Projections of GDP by several agenciesProjections of GDP by several agencies

No Agency Date 2010 2011

1 Gov’t of Indonesia April 2009 5.8 6.2

2 Bank Indonesia March 2010 5.7

3 World Bank March 2009 5.6 6.2

4 Economist April 2010 5.6 5.9

5 ADB April 2009 5.5 6.0

6 IMF April 2010 6.0 6.2

Projections of GDP by expenditureProjections of GDP by expenditure

* Actual** ProjectionSources: BPS and LP3E Kadin Indonesia.

Description 2008* 2009* 2010**

Private consumption 5,3 4.9 4.8 – 5.3

Government consumption 10.4 15.7 9.6 – 13.2

Gross fixed capital formation 11.7 3.3 7.1 – 8.6

Exports of goods & services 9.5 -9.7 6.4 – 7.2

Minus: Imports of goods & services 10.0 -15.0 8.0 – 8.8

Gross Domestic Product 6.1 4.5 5.4 – 6.5

Projections of GDP by sectorProjections of GDP by sector

 Sector 2008 2009 2010* 1. Agriculture 4.8 4.1 3.4-3.6 2. Mining 0.5 4.4 1.4-3.0 3. Manufacturing 3.7 2.1 3.5-5.0 4. Utilities 10.9 13,8 10.7-11.2 5. Construction 7.3 7.1 6.6-7.5 6. Trade and hospitality 7.2 1.1 4.6-6.5 7. Transport and communications 16.7 15.5 15.2-16.6 8. Finance 8.2 5.0 6.8-6.9 9. Services 6.4 6.4 6.4-6.5 GROSS DOMESTIC PRODUCT 6.1 4.5 5.4-6.5 *ProjectionSources: BPS and LP3E Kadin Indonesia.

Indonesia: selected economic indicatorsIndonesia: selected economic indicators

2007 2008 2009 2010* 2011*GDP gowth (y-o-y, %) 6.3 6.1 4.5 5.4 - 6.5 5.8 - 6.9Nominal GDP (current prices (Rp trillions) 3,951 4,951 5,613 6,225 6,866GDP per capita (current prices, US$) 1,938 2,270 2,590 2,800 3,100 Open unemployment rate (%) 9.8 8.6 7.9 7.5 7.0 Inflation rate (%, year end) 6.6 11.2 2.8 5.0 4.0BI rate (%, year end) 8.00 9.25 6.50 7.00 7.50 Fiscal balance (% of GDP) -1.3 -0.1 -1.6 -2.0 -1.8Public debt (% of GDP) 35.1 32.0 30.4 29.0 27.0 Currrency (Rp/US$, average) 9,163 9,767 10,350 9,000 - 9,250 8,500 - 9,000Current account balance (% of GDP) 2.5 0.1 1.9 1.2 1.0Reserves (US$ billions) 56.9 52.1 66.1 75.0 85.0S&P's Rating BB- BB- BB- BB BB+

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