Friday, September 27, 2013

Indonesia Market summaries 27 September 2013

Central Bureau of Statistics of Indonesia (Badan Pusat Statistik / BPS) will announce the September inflation and August trade balance at 1 October. Analyst predicts deflation will occur between the months of 0.05 % (MoM) and push inflation to 8.7 % between the year (YoY) which fell compare to inflation of 8.8% YoY last month. Since the beginning of the year (YTD), inflation will reach 7.9%.

Analyst observed that staple food commodities such as rice, peppers, onions, garlic, and beef are the main drivers. Transportation expenses will also be normal again after a period of Eid.

Nevertheless, core inflation can be increased slightly to 4.64% YoY from 4.48% YoY in August 2013. The main factor is the depreciation of 5.5% MoM and 0.6% MoM rise in gold last month.

Supply of cash funds increased 14.7% YoY in July from 11.8% YoY in June can cause pass through effect of core inflation in September 2013.

For the trade balance, there are trade deficit that will decline to U.S. $ 0.8 billion in August from U.S. $ 2.3 billion in July due to the lower imports. Import growth is predicted to fall to 2.4% YoY in August (compared to 6.5 % YoY in July 2013), while exports will be improve.

Predicted exports contracted 5.2% YoY from 6.1% previously. Decline in trade deficit also caused the value of imports, especially of fuel cut previously had increased because of Ied holiday. This cycle has occurred in recent years.

From 2005-2012 data, the trend of imports will rise by U.S. $ 1 billion in Eid then will drop. In addition , export performance also will not move significantly while the price of coal, palm oil, and rubber are still stable.

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