economic outlook 2011_deserve premium
TRANSCRIPT
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I n n i 2 1 1
Econ om ic Ou t look
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Capital inflows to emerging markets
Currencies undervalued Trade protectionism
Asset price inflation (bubble) in emerging
mar e sOR
e-ra ng asse pr ces Imbalance asset returns between emerging and
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Emerging markets:
(US$billion) 2009 2010(ytd)
% ytd
s a merg ng ar e s:ChinaIndia
2,399283.50
2,648295.4
10.44.2
. . .
Brazil
Mexico
239.05
90.93
285.90
110.65
19.6
21.7
Source: Bloomberg
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The foreign ownership position in
SBI 6.13 7.87
SUN 19.8 21.24
Stocks 3.1 3.5
. .
as % of Foreign 36.0 35.2Exchange Reserve
Source: BI
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* *
The highest contributors in Asia:
China 9.1 10.5 10.5 9.6n a
Indonesia.
4.5.
6.4.
6.0.
6.2
Some other emerging economy:BrazilRussia
-0.2-7.9
7.14.3
7.54.0
4.14.3
Some developed economy:European Community
Japan
-4,1
-5.2
1.0
2.4
1.7
2.6
1.5
2.3USA -2.6 3.3 2.7 2.2
World Economy1 -0.6 4.6 4.8 4.2
5
- -
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Recover of lobal econom is mostl driven b Asian Emer in
Economies: China & India - contributes about 36% of theWorld Population
nergy an commo y pr ces may con nue o ncrease The real demand may come from China and India; It may become speculative if this is the way to avoid weak US
The impact of US$600bn of QE2: Supporting low interest rate until 2Q11 a n a n ore gn n ows o emerg ng mar e s s nce on y a
few global investment choices
,unstable US economic recovery The current political situation in US may become another
important consideration
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Manageable inflation
Healthy budget trong omestic mar et
Rapid wealth increase
Demographic proportion with strong support frommiddle-upper class
Re-rating to investment grade as early as January
2011 Abundant natural resources commodities gain
Political stability
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Source: BPS
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8985
6000
7000
80
90
100
5761
67
4000
5000
60
70
32333539
292000
3000
30
40
0
1000
* *0
10
20
PDB Outstanding Utang Rasio Utang thd PDBGDP Debt Debt to GDP
10
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Indonesian wealth:
Total wealth of Indonesian in 1H10reached US$1.8 trillion or 5 times higher in
the decade; In average about US$12,112 per adult or
increased by 384% compared to the year 2000
range from US$10,000 to US$100,000;
lower than US$10,000;
90% of the wealth is mainl in ro ert non financial assets
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Indonesia dependency ratio
,*
120
140
10
12
Dependecy ratio (LHS)
Labor force participation (LHS)
Unempolyment rate (RHS)
%
80
1008
40
60
4
0
20
0
2
- - - - - - - - - - -
Notes: Dependecy ratio is the ratio of productive age (15+) to non prouctive age (< 15)
Dependecy ratio * is the ratio of wage earners to dependent (including age below 15)
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Rp.million %
Higher GDP/capita support householdsconsumption
Household Consumption Government ConsumptionShare to Total (%)
Household Consumption dominates GDP(average of 64% from 2000-2009)
20
25
30
5
6
7
GDP/cap growth (RHS)
GDP growth (RHS)
80
100
120GDP at current price
5
10
15
1
2
3
20
40
60
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 q1-2010 q2-2010
0
Source: BPS
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1H-
2010
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Driven mostly (still) by domestic consumption
Exports will improve as global trade is recovering, butmpor s may ou grow expor s
Physical investment may start to be realized with improvingglobal liquidity
Short-term foreign funds will keep on coming, at leastuntil 2Q11
But it is also very volatile
Interest rate ma be maintained until 2 11.
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Source: Centralbanks website
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Th m r ri k
Some rating upgrade in 2011 will help Indonesia into
Rating Agency Rating Outlook Upgrading
Moodys InvestorService
Ba2 Positive Ba1
Standard & Poors BB Positive BB+
Fitch Ratin BB+ Stable BBB- Positive
Japan Credit Rating
Agency
BBB- Stable Positive
Rating & InformationInc
BB+ Stable BBB-/Positive
16Source: IRU-BI
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exposure on Indonesian asset (Volatile short-term
inflows). Interest rate may go back to its up-trend creating
concern that foreign funds may pull out
other emerging economies such as South Korea,Thailand, Brazil.
Inflation threat due to:
Higher price for rice and other basic commodities
continue.
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Budget macro assumption:
- -
2009 2010 2010 2011
. . . .
Inflation rate (%) 4.5 5.0 5.3 5.3
Interest rate SBI 3m % 7.5 6.5 6.5 6.5
Exchange rate (Rp/USD) 10,500 10,000 9,200 9,250
ICP (USDpbr) 60 65 80 80
Lifting (mbpd) 0.96 0.965 0.965 0.97
Fiscal deficit (% of GDP) 2.5 1.6 2.2 1.7
Source: Ministry of Finance
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2010p 2011*
. .
Inflation rate (%) 6.5 6.5
BI Rate (%) 6.75 7.0
, - , , - ,
*PreliminaryP Projection
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R r h T mR r h T m
Christine Salim Lana SoelistianingsihHea o ResearcSector Coverage: Strategy, Mining, Resources,Plantation, Conglomerate
+6221 2854 8115+6221 83703280
Economist+6221 2854 8114
Adrianus Bias Prasuryo Joseph Pangaribuan
Analyst
Sector Coverage: Telecommunication,Cement, Construction, Property+6221 2854 8116adrianus.bias e-samuel.com
Analyst
Sector Coverage: Banking, Heavy equipment, Auto+6221 2854 [email protected]
Yualdo Yudopraw iroAnalyst
Sector Coverage: Metal, Consumer goods,
+6221 2854 [email protected]
2020
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8/8/2019 Economic Outlook 2011_deserve Premium
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Thank YouThank You
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