ECONOMIC UPDATE - Sustain above 5%

Household still played the most important role as it contributed 51.5% to GDP. It grew at 2.42% QoQ (5.51% YoY) in 2Q22. The growth was on the back of Ramadan momentum and the ease of Covid-19 cases back then.

ECONOMIC UPDATE - Inflation - Soaring up

Statistics Indonesia (BPS) recorded 0.64% MoM (4.94% YoY) of inflation in Jul-22 or the highest since Oct-15 where it was at 6.25% YoY. The rate was higher than our estimate and consensus at 4.72% and 4.82% YoY.

Fund Performance

ECONOMIC UPDATE - What to Expect - True mettle

Indonesia briskly rebounded as the economic growth jumped from -0.74% YoY in 1Q21 to 5.01% YoY in 1Q22. For 1H22, we predict it will grow at 4.7% YoY emphasizing the consistent economic recovery amid the pandemic.

ECONOMIC UPDATE - External trade review - After the export ban lifted

The slower import was still associated with China’s as its economy shrank sharply in 2Q22 recording a 0.4% YoY (vs 4.8% YoY in 1Q22) of economic growth after several Covid-19 lockdowns.

ECONOMIC UPDATE - External trade review - Protectionism backfires

The export plummeted due to the palm oil export ban to curb the rising domestic inflation from cooking oil prices hike in May-22. Besides, the slower import was still associated with China’s feeble economy as the China government still imposes several lockdowns there.

ECONOMIC UPDATE - Inflation - Challenges ahead

Statistics Indonesia (BPS) recorded 0.66% MoM (2.64% YoY) of inflation in Mar-22. The inflation rate was higher than our estimate at 2.61% YoY and Bloomberg consensus at 2.53% YoY.

ECONOMIC UPDATE - Inflation - Heating up

The inflation will go up with decent pace in 2H22 as the price normalization goes on especially on food and transportation prices after Ramadan month and the fuel price hike lately. Besides, the core inflation showed a slight deceleration compared to the previous month.

ECONOMIC UPDATE - BoP review - Good starter

Current account balance posted a USD0.22 bn surplus in 1Q22 (0.07% of GDP) or lower than consensus at USD0.92 bn of surplus.

ECONOMIC UPDATE - External trade review - The largest trade surplus

The export benefited from the elevated commodity prices while the import slowed down following China’s weaker economy last month.

ECONOMIC UPDATE - Inflation - Beyond Ramadan effect

Nevertheless, the inflation is beyond the Ramadan effect. Domestic manufacturers claimed that higher costs for inputs including raw materials and fuel were intensified.

ECONOMIC UPDATE - External trade review - Wary of China’s lockdown

The thick trade surplus provides liquidity and stronger external resilience for Indonesia. We may witness the trade surplus persists in 2Q22 if several countries reimposing mobility restrictions due to the Covid-19 cases, just like China.

ECONOMIC UPDATE - External trade review - Limited direct impact of war

Related to the rising global political tension between Russia and Ukraine, we assess that the war has no major direct impact so far but indirect impact, ranging from food prices to energy.

ECONOMIC UPDATE - inflation - Unexpectedly lower

Statistics Indonesia (BPS) recorded 0.02% MoM (+2.06% YoY) of deflation in Feb-22. The inflation rate was way lower than our estimate at 2.21% YoY and Bloomberg consensus at 2.30% YoY.