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.
The export benefited from the elevated commodity prices while the import slowed down following China’s weaker economy last month.
Nevertheless, the inflation is beyond the Ramadan effect. Domestic manufacturers claimed that higher costs for inputs including raw materials and fuel were intensified.
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.
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.
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.
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.
In overall 2021, current account balance posted the first surplus after 11 years at USD3.33 bn (0.45% of GDP) reversing the deficit at USD4.43 bn in 2020 (-0.42% of GDP).
Statistics Indonesia reported a thin trade surplus at USD932.9 mn in Jan-22. The surplus was higher than our estimate and consensus at USD35 mn and USD199 mn, respectively.
Indonesia has been catching a cold during the global pandemic. The symptom was obvious, starting with the drop of people purchasing power then the shutdown of firms. Panic started to kick in and the government had to step in.
After laying low in all over 2021, the inflation settled back within Bank Indonesia (BI) target at 3±1% YoY. Statistics Indonesia (BPS) recorded a 0.56% MoM (2.18% YoY) of inflation in Jan-22.
Statistics Indonesia reported a trade surplus at USD1.02 bn in Dec-21. The surplus was lower than our estimate and consensus at USD2.75 bn and USD3.51 bn, respectively.
Inflation is becoming a hot topic worldwide but in Indonesia, it is not the case as it remains cold. In Dec-21, Statistics Indonesia (BPS) recorded the highest inflation on monthly and yearly basis at 0.57% MoM (1.87% YoY).
Telecommunication (telecom) sector has been in talks for industry consolidation for a while. The last major M&A was happening back in 2013-2014 between EXCL and Axis and it has yet resulted in the ideal level of competitive landscape.
Heading to 2022F, we believe in order to achieve sustainable recovery in consumer buying power will require higher vaccinations rate to curb any potential mobility restrictions in the future.
According to google mobility index as of the 3rd week of October, Indonesia mobility data on retail and recreational area was around 3% above the base line.
Indonesian government sets Rp255.3 tn of healthcare budget allocation in 2022 (-21.7% YoY), which is 9.4% of the state budget. This consist of Rp139.4 tn regular healthcare budget (+11.3% YoY), and Rp115.9 tn PEN (covid-19) budget (-42.4% YoY).
Despite entering what is usually weak coal season demand, Newcastle coal price have shown little signs of losing its steam jumping 181% YtD to USD226/ton (301% YoY).
Despite bearing the brunt of China’s energy crisis caused by inflating coal and oil prices, nickel prices have surprisingly remained resilient increasing by 19% Ytd to USD19,739/ton and LME nickel inventory continued declining by 42% to 142 k wmt.
Residential sales in the primary market experienced a deep contraction in 2020. The declining property sales affected all types of residence, most significantly large houses.
In recent years, Indonesia’s biodiesel production has increased due to national biodiesel program, financed by the CPO fund to support biodiesel producers.
SOE contractors under our coverage reported weaker-than-expected net profit for 2Q21 and 1H21.
After posting a significant decline in 2020 at -36% YoY, earnings for banks under our coverage continues to recover as we expect a 44% YoY in 2021F.