Economy
- The Indonesian economy in 2009 has manifested considerable resilience in responding to the global economic crisis. Monetary relaxation and the fiscal stimulus for the domestic economy have provided a boost to consumer confidence, with the result that the household consumption has maintained brisk growth during the year. For 2009 overall the Indonesia Central Bank forecasts Indonesia’s economic growth to reach 4.3% and for 2010 will reach 5.0% - 5.5%.
- As the inflation remains low, the Central Bank has decided to keep the benchmark interest rate or BI rate unchanged at 6.5%, which is considered to be consistent with the achievement of the inflation target in 2010 set at 5%.
- In October 2009 Indonesia posted this year’s record high in export with US$11.88 billion amid falling demand caused by the global economic downturn. Export in October rose by 10.12% from previous year in the same period and by 20.72% from the previous month. The increase in export was dominated by mining products, while industrial and agricultural products dropped. Imports in October rose as well by 11.16% from September 2009. However it was dropped by 30.84% from October last year.
Financial Sector
- In the financial sector, the banking system has shown improved response to the loose bias monetary stance, although the decline in lending rates has fallen short of expectation. While credit recorded only limited expansion about 7% in 2009, credit growth in 2010 is predicted to reach 15%-17% in response to rising confidence among economic actors. The aggregate banking liquidity remains sufficient for banking activity in financing the economy. The average CAR is maintained at 17.6% with comfortably safe level of NPLs gross at less than 5%.
- Some big banks, a.o. Bank Mandiri, Bank Negara Indonesia and Bank Central Asia, project the credit expansion in 2010 maximum by 20%. Only Bank Rakyat Indonesia is projecting the credit expansion 25% - 30%.
Companies
- PT Robert Bosch, a 100% subsidiary company of Robert Bosch GmbH Germany, has just opened a new Bosch Automotive Showroom in Jakarta to further build up its brand in the local automotive market. It is also planning to establish its own factory in Indonesia, since all products are still imported from their plant in neighbouring countries Thailand, China and India. Its sales in Indonesia is expecting to reach US$45 million in 2009.
- The new Law of Special Economic Zones has been enacted recently by the House of Representatives. The new legislation envisages the development of modern industrial clusters catering to both domestic and multinational companies. The zones will provide companies with fiscal incentives, such as reduced corporate-income and land taxes, and will exempt them from value-added and luxury goods taxes. The government has received proposals from the local governments for the establishments of up to 22 Special Economic Zones.
