ECONOMIC UPDATE - Inflation remains within the BI's target range, rising 2.56% YoY

According to Statistics Indonesia (BPS), the monthly inflation rate in October slowed to 0.17% MoM, lower than the previous month's 0.19% MoM. This came in below both our projection of 0.18% MoM and the consensus estimate of 0.20% MoM.

ECONOMIC UPDATE- Monetary review - Surprise rate hike

The current interest rate level is adequate for maintaining Rupiah stability, so we expect BI to retain the interest rate at 6.00% until the end of the year. Furthermore, we also anticipate that BI will cut the interest rate next year to 5.00%, in line with the easing of global uncertainty.

Fund Performance

ECONOMIC UPDATE - External trade review - Trade surplus widens on lower imports

Indonesia has sustained a positive trend in international trade since May 2020, resulting in 41 consecutive months of trade surplus. Looking ahead, it is expected that export performance will continue to deteriorate due to declining commodity prices, a result of reduced global demand. 

ECONOMIC UPDATE - Inflation - The inflation rate cools to the slowest pace since February-22

The primary factor behind this inflation was the food, beverage, and tobacco basket, which contributed 0.09% MoM to the inflation rate. Besides, the transportation group displayed the second highest growth. This pattern aligns with the government intervention, which increased the price of...

ECONOMIC UPDATE - External trade review - Trade surplus widens on lower imports

In contrast, imports are poised to outpace exports, driven by the sustained strength of the domestic economy. As a result, our forecast points to a further narrowing of the trade surplus, with the possibility of the balance turning into a deficit.

ECONOMIC UPDATE - Inflation cools to 3.52%, its slowest pace since April-22

The main contributors to the inflation were food, beverages, and tobacco basket, contributing 0.10% MoM and growing by 0.39% MoM, mostly due to Eid-al-Adha. On the other hand, transportation basket experienced deflation of -0.10% MoM.

ECONOMIC UPDATE - Inflation - The disinflation rate hit its slowest pace since October-22

Volatile food prices demonstrated a deflation rate of -0.51% MoM, marking a decline from July's 0.17% MoM increase. Meanwhile, administered prices experienced a deceleration to -0.02% MoM, in contrast to a rate of 0.44% MoM in the previous month.

ECONOMIC UPDATE - BoP review - Indonesia’s BoP turns a deficit

The triple intervention refers to the BI interventions in the spot, Domestic Non-Deliverable Forwards (DNDF), and government securities (SBN) markets. Rupiah was reported at Rp15,325/USD as of 21 August-23, higher than the macroeconomic assumption on APBN 2023 at Rp14,800/USD.

ECONOMIC UPDATE - External trade review - The trade surplus narrows more than expected

Imports are projected to outperform exports, propelled by the enduring strength of the domestic economy. As a consequence, our forecast indicates a further decrease in the trade surplus and the possibility of the balance shifting into a deficit.

ECONOMIC UPDATE - GDP - Better-than-expected 2Q23 GDP

Considering the global economic slowdown and the normalization of commodity prices, we expect a slight deceleration in economic growth from 5.31% YoY in FY22 to 5.0% YoY in FY23.

ECONOMIC UPDATE - Inflation cools to 3.08%, hitting the slowest pace since March-22

The education group exhibited the highest growth with a 0.66% MoM increase, contributing 0.04% MoM to the inflation rate, which aligns with the start of the new school year.

ECONOMIC UPDATE - External trade review - Lower imports widen trade surplus

The additional forex reserves are essential for maintaining the stability of the Rupiah. We expect the average exchange rate to be Rp14,980/USD, while economic growth is projected to reach 5.0% YoY this year.

ECONOMIC OUTLOOK - 2H23 - Macroeconomic outlook ahead of general elections

We expect investment to grow by 4.80% YoY in 2H23, compared to our forecast for 1H22 at 3.60% YoY. However, it is crucial for the government to maintain political stability, as investors tend to wait and see amidst political escalation.