(MENAFNEditorial)
Core Views
* Despite fears that Prabowo Subianto's red and white coalition would look to block Jokowi's policy-making efforts the President was able to push through sweeping fuel subsidy reductions in both November and December 2014 on his own accord. This will greatly reduce the government's subsidy bill and improve its fiscal spending mix and is also a positive sign in terms of Jokowi's reform intentions going forward.
* We have downgraded Indonesia's real GDP growth forecast in 2015 to 5.5% (from 6.0% previously) as we note that tight monetary policy will keep a lid on investment activity throughout H115. That said this rate still implies an acceleration from 2014's estimated 5.1% growth rate.
* The government's subsidy savings which are estimated at approximately USD18.2bn in 2015 will be channeled towards infrastructure investment as well as direct fiscal transfers for the poor. This should have a stimulative effect on economic growth in 2015 and represents a significantly more efficient spending programme going forward.
Full Report Details at
- http://www.fastmr.com/prod/951895_indonesia_country_risk_report_q2_2015.aspx?afid=101
Major Forecast Changes
* We have downgraded our 2015 average forecast for the Indonesian rupiah to IDR12694 /USD from IDR12100 /USD previously owing to broad US dollar strength. In particular we note that it will be difficult for the rupiah to recover from current levels even as the country's fundamentals improve as regional currencies remain under considerable pressure.
Key Risks To Outlook
* Indonesia risks a return to the more polarised political environment witnessed before outgoing President Susilo Bambang Yudhoyono took office in the mid-2000s.
* Indonesia's poor net international investment position along with a current account deficit make it vulnerable to periods of acute risk aversion in the global economy. In an environment of rising global interest rates this is an increasing risk.
The Indonesia Country Risk Report helps businesses with market assessment strategic planning and decision making to promote growth and profitability in Indonesia. It is an essential tool for CEOs Chairmen Finance Directors/CFOs Managing Directors Marketing/Sales Directors with commercial interests in this emerging market.
An influential new analysis of Indonesia's economic political and financial prospects through end-2019 just published by award-winning forecasters Business Monitor International (BMI).
Key Uses
* Forecast the pace and stability of Indonesia's economic and industry growth through end-2019.
* Identify and evaluate adverse political and economic trends to facilitate risk mitigation.
* Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
* Contextualise Indonesia's country risks against regional peers using BMI's country comparative Risk Index system.
* Evaluate external threats to doing business in Indonesia including currency volatility the commodity price boom and protectionist policies.
The Indonesia Country Risk Report by Business Monitor International (BMI) includes four major sections:Economic OutlookPolitical OutlookOperational RiskandKey Sector Outlook.
Economic Outlook:
How will the Indonesia' economic policy-making and performance impact on corporate profitability over 2015-2019?
BMI provides our fully independent 5-year forecasts for Indonesia through end-2019 for more than 50 economic and key industry indicators. We evaluate growth and also forecast the impact of economic management.
Economic Outlook Contents
The Indonesia Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019 set against government views and BMI's evaluation of global and regional prospects.
Key Areas Covered:
Data:
* Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita) population inflation current account balance and the exchange rate.
* BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk and rates the business environment within a global and regional context.
Written Analysis:
* Economic Activity - real GDP growth employment inflation consumption (retail sales and confidence).
* Balance of Payments - trade and investment current and capital account.
* Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
* Exchange Rate Policy - currency controls foreign investment flows exchange rates and foreign exchange reserves.
* Fiscal Policy - macroeconomic strategy and policies government finance and tax reforms.
* Foreign Direct Investment - approvals inflows and climate.
* External Debt - debt profile (short and long-term plus public and private sector obligations).
* Global Assumptions - forecasts for each year to end-2019 covering: major commodities growth in key regions inflation and interest and exchange rates in the United States Japan China and the eurozone.
Key Benefits
* Rely upon BMI's 100% independent forecast scenarios for Indonesia and underlying assumptions - we take no advertising and are privately-owned.
* Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Indonesia sourced and fully maintained by BMI from an extensive network of private sector government and multilateral contacts.
* Gain key insights into the current and future direction of government economic policy which could significantly affect your company's business prospects from BMI's team of analysts and economists.
Political Outlook:
What are the political risks to doing business in Indonesia over the next 5-years?
BMI's Indonesia country Risk Index evaluates the short- and medium-term threats to political stability.
Political Outlook Contents
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