- Riset Terkini
Market Outlook: RAPBN-P 2015
January 21, 2015 09:17 WIB
Details of draft state budget 2015 is out, and it is encouraging to see government’s clear effort to encourage growth, allocating greater spending on a more productive sector. Reductions in subsidy have opened greater opportunity for the government to make an opportune spending to boost growth.
On revenue side, an increase in tax revenue will be the main source of funding, which saw an increase of 7.6% vs previous 2015 budget to IDR1,485t, with tax to GDP ratio improved to 13.6%. Higher tax income is critical, in our view, especially with considerable decline on crude oil price, which have great consequence on government’s non-tax income. The main support to the increase in tax income would come from: income tax (up 5.6%), VAT (up 9.8%) and excise tax (up 11.8%). On the latter, it will mainly come from excise on tobacco (up 12.9%). Given higher dependency toward tax related income, bigger tax revenue target this year would add pressure as any poor execution on this front would lead to the speed of progress on most of government development target.
In term of spending, there are eight ministries which got budgets allocation of above Rp40tn, and from those ministries, transportation and public works sector got the biggest increment. In our view, this would signify government clear target to improve the current dis-connectivity all across Indonesia, which is supportive for medium to long term growth. The Ministry of Public Works and Public Housing saw an increment of 40.6% allocation to IDR119t, while Ministry of Transportation get 44.7% higher budget of IDR65t. From only an average of 6.2% of total expenditures during the MP3EI period, the government’s budget allocation to these two ministries has been considerably increased to 9.2% for 2015.
On macro assumption, the economic growth of 5.8% is quite challenging to achieve, in our view, and would arguably require impeccable execution capability to accelerate growth momentum.
We continue to believe that SOEs will serve as the agents of growth, especially with a more commitment from government to improve capital based by allocating IDR72t budget this year, a massive leap from a mere IDR5.1t. However, there’s also a new associated risk for SOEs, as seen in the recent surprising move of the government to cut cement price produced by SOEs which was beyond our expectation since we had believed that pricing at the micro level would be solely determined by supply/demand dynamics, and that any government intervention would have unnecessary implications as reflected in the growing concern from investors that similar controls could be imposed in other sectors where SOEs are dominant. In our view, it is too early to conclude that such fears are warranted.
We continue to pitch our 10 top picks in 2015: BMRI, BBRI, TLKM, SMGR, PTPP, WSKT, ACES, ICBP, INCO and BSDE.Please find the attached files our report on the draft revised budget as well as the impact to the construction sector.
Trade Outlook December 2014
December 23, 2014 10:19 WIB
Compared to September’s, October exports had slow growing of 0.5 percent to US$ 15.3 bn, stemmed from contracting oil and gas exports (-5.8 percent MoM) and flat growth of non oil and gas exports (+1.8 percent MoM). Exports volume weakened 4,8 percent MoM, while it rose by 5.5 percent in term of average aggregate prices. ?
The exports of two major products showed mixed result in October. Exports of animal and vegetable fats (HS 15) was increasing by 29.7 percenr, while the mineral fuels exports (HS 27) had 11.6 percent lower. The exports of other non oil and gas products, such as electrical machinery and mechanical machinery, remain boosted.
Shipments of Indonesia’s non oil and gas export products to China and the U.S. slumped by 7.2 percent and 3.7 percent. Meanwhile the non oil and gas exports to Japan still posted 5.1 percent higher.
In contrast of exports, the October’s imports dropped 1.4 percent MoM, which contributed by falling oil and gas imports (-2.0 percent MoM), and non oil and gas imports (-1.2 percent MoM). October’s imports volume was slightly up 0.12 percent although the average aggregate prices contracted 1.5 percent MoM.
?By product type, imports of mechanical machinery and equipment (HS 84) and electrical machinery and equipment (HS 85) dipped 3.7 percent and 3.8 percent, respectively. Shipments of non oil and gas products from China declined by 8.2 percent, while imports from Japan and Singapore rose by 2.5 percent and 23.5 percent, respectively.
By classification, only the imports of capital goods posted an increase (+4.4 percent). Imports of raw materials were down (-1.6 percent), followed by imports of consumption goods (-12.4 percent). In the January-October period, imports of raw materials accounted for 76.4 percent of Indonesia’s total imports.
As a results, Indonesia recorded small trade surplus of US$ 23.2 mn, from US$ 270.3 mn deficit in September. In cumulative of 10 months, Indonesia’s trade deficit reached US$ 1.64 bn– or lower than the deficit of US$ 6.4 bn recorded in the corresponding period of last year.
CPI & SBI Outlook November 2014
November 27, 2014 14:54 WIB
Inflationary pressures began to rise in October. After posting benign inflation of 0.27 percent MoM in September, October’s MoM inflation accelerated to 0.47 percent. Nonetheless, on a yearly basis, inflation reached only 4.83 percent. And cumulatively, in the January-October period, headline inflation only reached 4.19 percent, or far lower than last year’s 7.42 percent.
All CPI components rose in October. The housing component (+1.04 percent) and the medical care component (+0.60 percent) recorded the largest MoM increases. The other components also posted increases: the prepared foods component rose 0.43 percent, the foodstuffs component edged up 0.25 percent, the education component climbed 0.23 percent, the clothing component added 0.21 percent, and the transportation component rose 0.16 percent.
In November, the government finally bit the bullet and hiked subsidized fuel prices to create a more sustainable state budget. Through this policy, the price of subsidized premium gasoline was raised from IDR 6,500/liter to IDR 8,500/liter, while the price of diesel fuel was upped from IDR 5,500/liter to IDR 7,500/liter. The price of subsidized kerosene was kept unchanged at IDR 2,500/liter. In our estimates, the government’s decision to hike fuel prices by 32 percent on average will create additional inflation of 2.2 percent, meaning that the inflation rate will reach around 7.4 percent at the end of 2014.
To cushion the impact of the fuel price hikes, the government provided social assistance to low income families through several socialprotection cards, i.e. the Indonesia Health Card (KIS), the Indonesia Smart Card (KIP) and the Prosperous Family Card (KKS). .. For November, given the absence of seasonal factors, heightened inflationary pressures will be driven by the government’s decision to hike subsidized fuel prices. Indeed, inflationary expectations already increased ahead of the fuel price hikes with the prices of several types of commodities heading higher. Then, after the announcement, increases in transportation fares and the prices of some goods followed. In our estimate, the full impact of the fuel price hikes will be seen in the December inflation figure.
Against this backdrop, we predict inflation of 1.29 percent MoM in November, translating into YoY inflation of 6.01 percent.
|Exports||US$ 16.40 bn|
|Imports||US$ 16.50 bn|
|Trade Balance||US$ 82.10 bn|
Forecast for 2014
|Exports||US$ 196.40 bn|
|Imports||US$ 192.30 bn|
|Trade Balance||US$ 4.10 bn|
|End of period(% p.a)||7.75|
Forecast for 2014
- Company Update: MAPI
- Company Update: BIRD
- Market Outlook - Top Picks for 2015
- Consumer Confidence January 2015
- December 2014 Inflation Outlook
- Trade Outlook August 2014
- Trade Outlook July 2014
- Trade Outlook June 2014
- Trade Outlook May 2014
- Trade Outlook April 2014
CPI & SBI Outlook
- CPI & SBI Outlook June 2014
- CPI & SBI Outlook May 2014
- CPI & SBI Outlook April 2014
- CPI & SBI Outlook Maret 2014
- CPI & SBI Outlook Januari 2014