Fri, 07 Aug 2015
The Indonesian economy has logged another quarter of growth below 5 per cent, underscoring the difficulty facing a new president who had pledged to boost economic activity and jobs in South-East Asia's largest economy.

The figure from Indonesia's official statistics agency shows gross domestic product (GDP) growth at 4.67 per cent for the second quarter, its lowest levels since 2009.

"What the number certainly tells us is that the Indonesian economy is struggling to find a base. And while there is confidence it will find a base, the pick-up won't be as strong," ANZ chief ASEAN economist Glenn Maguire said.

Mr Maguire said the country has become over-reliant on government measures to provide a boost to the economy, yet spending on public works at the end of June was just 10 per cent of the budget allocation.

"The big ticket item that needs to be seen to recover is government investment," he said.

According to Standard Chartered senior economist Eric Sugandi, while monthly growth numbers had shown a small bump, there was concern that it represented spending by regional governments for administrative costs rather than public works.

"What makes me worry is the government spending. As of July capital spending in only 11 per cent of the allocation," he said.

Indonesia, once the darling of the region, has seen its growth rate dragged back by weak commodity prices and a government that has so far been unable to push through major infrastructure projects.

Indonesia needs to upgrade its transport, energy and maritime facilities to provide a competitive environment for its own goods and encourage investment.

"I don't think things will move quite as quickly as hoped or expected by the government," said PricewaterhouseCoopers' (PwC) partner Andrew Parker, adding that "there is the age-old problem of projects simply not being ready to go" because the right framework is not yet in place.

Protectionism at odds with competing neighbours

A report by the professional services firm has found the government's ambitious infrastructure plans are likely to fall short of requirements needed to boost GDP growth.

However, PwC noted that opportunities still existed over the next few years to change the investment and regulatory climate.

Both the ANZ and Standard Chartered said that the latest GDP figure represents something close to the bottom of the nation's slowdown, but that any pick-up is likely to be slight and short of the government's target.

"Until you see that investment flow becoming firmer and wider then economic growth recovery will be shallow," Mr Maguire said.

The Indonesian government is estimating growth as high as 5.2 per cent this year as fiscal spending picks up, less though than the initial target of 5.7 per cent.

The nation's central bank is constrained by a weakening of the rupiah, the possibility of a further hit from the expected interest rate rise in the United States, and an inflation rate of more than 7 per cent.

It also faces a softening in consumer spending, one of the main drivers of growth in the economy, seen most glaringly in a double-digit turndown in car sales for the year so far.

Investors have also raised concerns about a government that has introduced a raft of protectionist measures that are creating uncertainty about the government's intentions.

According to Mr Maguire, Indonesia is still attracting its fair share of foreign direct investment, but Vietnam and Thailand are exploiting a more open-door policy at a time their Indonesian neighbour is on a different path.





News Search/Filter
Transaction Rates
26 May 18
Buy
Sell
AED1
3,841.20
3,841.20
AFN1
196.39
196.39
ALL1
129.88
129.88
AMD1
29.23
29.23
ANG1
7,857.46
7,857.46
AOA1
60.15
60.15
ARS1
573.90
573.90
AUD1
10,659.11
10,659.11
AWG1
7,893.04
7,893.04
AZN1
8,287.11
8,287.11
BAM1
8,443.99
8,443.99
BBD1
7,054.40
7,054.40
BDT1
166.91
166.91
BGN1
8,420.63
8,420.63
BHD1
37,361.97
37,361.97
BIF1
7.88
7.88
BMD1
14,108.81
14,108.81
BND1
10,484.35
10,484.35
BOB1
2,041.12
2,041.12
BRL1
3,860.35
3,860.35
BSD1
14,108.81
14,108.81
BTC1
104,131,851
104,131,851
BTN1
208.14
208.14
BWP1
1,420.92
1,420.92
BYN1
7,039.59
7,039.59
BZD1
7,016.83
7,016.83
CAD1
10,877.89
10,877.89
CDF1
8.73
8.73
CHF1
14,254.42
14,254.42
CLF1
617,724.00
617,724.00
CLP1
22.58
22.58
CNH1
2,208.40
2,208.40
CNY1
2,208.57
2,208.57
COP1
4.90
4.90
CRC1
24.93
24.93
CUC1
14,108.81
14,108.81
CUP1
553.28
553.28
CVE1
149.77
149.77
CZK1
638.93
638.93
DJF1
79.26
79.26
DKK1
2,206.53
2,206.53
DOP1
285.25
285.25
DZD1
121.20
121.20
EGP1
787.87
787.87
ERN1
934.42
934.42
ETB1
512.86
512.86
EUR1
16,445.95
16,445.95
FJD1
6,816.68
6,816.68
FKP1
18,774.58
18,774.58
GBP1
18,774.58
18,774.58
GEL1
5,703.96
5,703.96
GGP1
18,774.58
18,774.58
GHS1
3,043.97
3,043.97
GIP1
18,774.58
18,774.58
GMD1
299.16
299.16
GNF1
1.56
1.56
GTQ1
1,886.83
1,886.83
GYD1
67.46
67.46
HKD1
1,798.18
1,798.18
HNL1
591.07
591.07
HRK1
2,224.10
2,224.10
HTG1
219.26
219.26
HUF1
51.44
51.44
IDR1
1.00
1.00
ILS1
3,961.85
3,961.85
IMP1
18,774.58
18,774.58
INR1
208.30
208.30
IQD1
11.87
11.87
IRR1
0.33
0.33
ISK1
132.81
132.81
JEP1
18,774.58
18,774.58
JMD1
111.71
111.71
JOD1
19,888.21
19,888.21
JPY1
128.96
128.96
KES1
139.42
139.42
KGS1
206.70
206.70
KHR1
3.46
3.46
KMF1
33.42
33.42
KPW1
15.67
15.67
KRW1
13.09
13.09
KWD1
46,667.40
46,667.40
KYD1
16,924.65
16,924.65
KZT1
42.90
42.90
LAK1
1.68
1.68
LBP1
9.32
9.32
LKR1
89.27
89.27
LRD1
102.62
102.62
LSL1
1,131.87
1,131.87
LYD1
10,412.41
10,412.41
MAD1
1,484.35
1,484.35
MDL1
838.41
838.41
MGA1
4.31
4.31
MKD1
266.90
266.90
MMK1
10.39
10.39
MNT1
5.85
5.85
MOP1
1,745.36
1,745.36
MRO1
39.68
39.68
MRU1
395.20
395.20
MUR1
405.01
405.01
MVR1
909.67
909.67
MWK1
19.59
19.59
MXN1
722.08
722.08
MYR1
3,544.06
3,544.06
MZN1
232.75
232.75
NAD1
1,130.06
1,130.06
NGN1
39.08
39.08
NIO1
448.61
448.61
NOK1
1,726.37
1,726.37
NPR1
130.06
130.06
NZD1
9,757.65
9,757.65
OMR1
36,644.65
36,644.65
PAB1
14,108.81
14,108.81
PEN1
4,316.60
4,316.60
PGK1
4,320.36
4,320.36
PHP1
268.15
268.15
PKR1
122.04
122.04
PLN1
3,814.88
3,814.88
PYG1
2.47
2.47
QAR1
3,874.98
3,874.98
RON1
3,552.08
3,552.08
RSD1
139.14
139.14
RUB1
226.81
226.81
RWF1
16.38
16.38
SAR1
3,760.54
3,760.54
SBD1
1,792.37
1,792.37
SCR1
1,048.78
1,048.78
SDG1
783.60
783.60
SEK1
1,609.12
1,609.12
SGD1
10,514.85
10,514.85
SHP1
18,774.58
18,774.58
SLL1
1.80
1.80
SOS1
24.64
24.64
SRD1
1,889.23
1,889.23
SSP1
108.30
108.30
STD1
0.67
0.67
STN1
669.93
669.93
SVC1
1,611.97
1,611.97
SYP1
27.39
27.39
SZL1
1,130.06
1,130.06
THB1
442.31
442.31
TJS1
1,569.65
1,569.65
TMT1
4,019.62
4,019.62
TND1
5,526.81
5,526.81
TOP1
6,176.24
6,176.24
TRY1
2,996.71
2,996.71
TTD1
2,092.62
2,092.62
TWD1
470.96
470.96
TZS1
6.18
6.18
UAH1
540.22
540.22
UGX1
3.77
3.77
USD1
14,108.81
14,108.81
UYU1
451.22
451.22
UZS1
1.76
1.76
VEF1
0.17
0.17
VND1
0.61
0.61
VUV1
131.31
131.31
WST1
5,481.42
5,481.42
XAF1
25.07
25.07
XAG1
232,750.99
232,750.99
XAU1
18,363,203.04
18,363,203.04
XCD1
5,220.55
5,220.55
XDR1
20,008.95
20,008.95
XOF1
25.07
25.07
XPD1
13,851,320.11
13,851,320.11
XPF1
137.81
137.81
XPT1
12,726,467.28
12,726,467.28
YER1
56.35
56.35
ZAR1
1,127.97
1,127.97
ZMW1
1,361.85
1,361.85
ZWL1
43.76
43.76
Taxation Exchange Rates
31 Aug 16 - 06 Sep 16
USD 1
13,232.00
AUD 1
10,043.30
CAD 1
10,213.70
DKK 1
1,999.40
HKD 1
1,706.22
MYR 1
3,283.28
NZD 1
9,623.63
NOK 1
1,605.23
GBP 1
17,433.70
SGD 1
9,757.68
SEK 1
1,569.45
CHF 1
13,631.10
JPY 100
13,101.00
MMK 1
11.01
INR 1
197.29
KWD 1
43,920.70
PKR 1
126.23
PHP 1
285.00
SAR 1
3,528.53
LKR 1
91.12
THB 1
382.08
BND 1
9,756.53
EUR 1
14,885.50
CNY 1
1,987.61

Okusi Associates: Indonesian Business & Management Services