Indonesia Economy Forum

[Indos]

AlhamduliLLAH​

​

Indonesian GDP growth accelerates in Q2, beats forecast​

August 4, 20228:29 PM PDT
Last Updated an hour ago

By Stefanno Sulaiman
and Gayatri Suroyo

People wearing protective masks to prevent the spread of coronavirus disease (COVID) walk through a pedestrian bridge during the afternoon rush hours at the business district in Jakarta, Indonesia, March 15, 2022. REUTERS/Willy Kurniawan

• Summary
• Q2 GDP +5.44% y/y, higher than +5.17% in poll
• Exports up almost 20%; "impressive", says stats bureau
• Headwinds seen in second half - analyst

JAKARTA, Aug 5 (Reuters) - Indonesia's economic growth accelerated in the April-June quarter amid an export boom driven by rising commodity prices, official data showed on Friday, but monetary tightening, rising inflation and a global recession risk threaten the outlook.

Second-quarter gross domestic product (GDP) was up 5.44% on a year earlier, showing the fastest growth rate in a year, according to Statistics Indonesia data. That beat the median forecast for a 5.17% rise in a Reuters poll and the first quarter's 5.01% annual growth.

Exports expanded nearly 20% from a year before, a performance that the statistics bureau called "impressive". This compared with 16.22% annual growth seen in the previous quarter.

Household consumption, which accounts for more than half of GDP, recovered further after the lifting of COVID-19 restrictions, with the Eid al-Fitr celebration in May providing a further boost. However, investment slowed.

By sector, food and beverages, mining, construction and transport and warehousing saw faster expansion than in the previous period.

It is "strong growth but it won't last as headwinds mount," Gareth Leather, an analyst with Capital Economics, said in a note, predicting exports would be affected by declining commodity prices and a global growth slowdown.

Prices of palm oil, one of the country's top export products, have plunged in recent months, but Indonesian coal prices are still hovering around record highs due to strong demand from such markets as Europe.

Already, Indonesia's central bank said last month the rise in full-year 2022 GDP from 2021 would be at the lower end of the range of 4.5% to 5.3%. It previously forecast growth in the middle of that range. read more

In lowering its forecast, the central bank said a global slowdown would dent exports and a rise in inflation at home would slow recovery in consumption.

Consumer prices in July were up 4.94% from a year earlier, marking a seven-year high in inflation and prompting calls by economists for Bank Indonesia to lift interest rates from pandemic-era lows. read more

While the latest GDP data showed "the relatively insular nature of Indonesia's economy" at a time when recession fears dominate headlines, the fact that the economy was doing well should push Bank Indonesia to hike interest rates, said Wellian Wiranto, an economist with OCBC.

OCBC expects the central bank to raise interest rate at this month's policy review.

Indonesian GDP growth accelerates in Q2, beats forecast

Indonesia's economic growth accelerated in the April-June quarter amid an export boom driven by rising commodity prices, official data showed on Friday, but monetary tightening, rising inflation and a global recession risk threaten the outlook.

www.reuters.com

 

[Indos]

Indonesia to boost sorghum, corn production to secure grain supplies​

Indonesia is preparing 115,000ha of land for 2023 and another 154,000ha for 2024 to cultivate sorghum. PHOTO: AFP

PUBLISHED

AUG 4, 2022, 5:47 PM SGT

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JAKARTA (REUTERS) - Indonesia will expand the cultivation of sorghum and corn to help secure grain supplies, with global imports of wheat disrupted by the war in Ukraine, a senior Cabinet minister said Thursday (Aug 4).

Indonesia mostly consumes rice as a staple food, but it is among the world's biggest importers of wheat, which it uses for household consumption and animal feed.

The country is preparing 115,000ha of land for 2023 and another 154,000ha for 2024 to cultivate sorghum, Coordinating Minister for Economic Affairs Airlangga Hartarto told a virtual media briefing.

South-east Asia's biggest country currently has around 4,300ha of land under sorghum cultivation, producing 15,000 tonnes of the grain as of June.

Mr Airlangga noted that a number of countries had imposed export restrictions on wheat this year to secure their own domestic supplies during the Ukraine war.

"Therefore, we have to produce substitutes for wheat," he said, adding that, other than sorghum, Indonesia could also increase production of sago and cassava.

Mr Airlangga said sorghum could also be used for animal feed and to produce bio-ethanol.

Earlier this week, Mr Airlangga said the authorities would increase production of corn, by expanding cultivation in some eastern provinces such as Papua, West Papua and North Maluku.

The government would also distribute better quality corn seeds to help increase yields to 13 tonnes per hectare, up from an average of 5 tonnes per hectare now.

Indonesia to boost sorghum, corn production to secure grain supplies

Close to 500,000ha are being earmarked for sorghum cultivation in the next two years. Read more at straitstimes.com.

www.straitstimes.com

 

[Indos]

@Bilal9 bro, another incredible Indian economist with biased projection........

Asia-Pacific: Indonesia and Hong Kong SAR Q2 GDP

GDP data for Indonesia and Hong Kong SAR are set to dominate APAC releases in the coming week. Our forecasts point to a 3.8% rate of growth (slowing from 5.01% YoY) in Indonesia. More concerningly, in Hong Kong SAR our estimates predict a second consecutive contraction at -0.84% (although slowing from Q1 decline of 4%)

29 July 2022 Chris Williamson Rajiv Biswas Shreeya Patel

Sharing insights elevates their impact

This week sees the release of worldwide manufacturing and services PMI data which will give an insight into global growth, inflation and labour market trends in key economies for the first month of the third quarter

ihsmarkit.com

 

[Indos]

Indonesia’s GDP Growth Fueled by Spending Revival, Exports​

• 2Q GDP growth fastest in four quarters, beats median estimate
• Resurgent consumption, record-high exports drove growth faster

• 
  
  Palm oil loaded into trucks from a tanker docked at Tanjung Priok Port in Jakarta in April.
  Photographer: Dimas Ardian/Bloomberg
  By
  Grace Sihombing and
  Claire Jiao
  August 4, 2022 at 7:18 PM PDT, Updated onAugust 4, 2022 at 8:47 PM PDT
  
  
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  Indonesia’s economy performed better than estimated in the second quarter, powered by a commodity-led exports boom and robust spending that could nudge the central bank to begin its rate liftoff.
  
  Gross domestic product grew 5.44% in the three months to June from a year ago, the statistics bureau said on Friday. That’s the fastest increase in four quarters and beats the median estimate of a 5.17% gain in a Bloomberg survey. Compared with the previous quarter, GDP expanded 3.72%, beating the consensus for a 3.47% rise.
  
  “Indonesia’s economy grew impressively in the second quarter amid global inflationary pressures and recession risks, showing that our recovery trend continues and even strengthens,” Margo Yuwono, head of the statistics office, said at the briefing in Jakarta.
  
  
  
  
  
  
  Southeast Asia’s largest economy is steadily gaining momentum after a broader reopening that spurred mobility and travel especially during the Ramadan and Eid holidays. Growth in private consumption, which makes up more than half of domestic output, quickened to 5.51% last quarter from 4.34% in the January-March period.
  
  
  
  Passengers with their luggage, during the the Eid al-Fitr holiday, at Kampung Rambutan bus station in Jakarta, in April. Photographer: Dimas Ardian/Bloomberg
  
  Subsidies, social assistance and an “accommodative policy rate have been effective in maintaining inflation and purchasing power” during the period, Yuwono said.
  
  
  Indonesia’s benchmark stock index was unchanged as of 10:40 a.m. local time, while the rupiah gained 0.2% against the dollar.
  
  Space to Hike
  
  While Indonesia’s inflation hasn’t soared as much as neighbors like Thailand and the Philippines, headline consumer price gains have breached the central bank’s target and were at a seven-year high in July. Even the core inflation measure tracked by Bank Indonesia is closer to the mid-point of its 2%-4% goal.
  
  “The fact that the Indonesian economy is doing well should give Bank Indonesia both the space to hike rate and a reminder nudge of the risk of not tightening,” said Oversea-Chinese Banking Corp. economist Wellian Wiranto, adding he still sees a “good chance” of a rate hike this month.
  Indonesia’s stronger momentum in the second quarter defied headwinds from higher inflation, financial market volatility and the tapering of fiscal stimulus. The question in Bank Indonesia’s mind will be whether this resilience -- underpinned by the release of pent-up demand from reopening and soaring prices for commodity exports -- has staying power
  
  Tamara Henderson, Asean economist
• 
  
  
  
• Meanwhile, exports jumped 19.74% as the world’s largest palm oil exporter enjoyed a windfall from rising commodity exports and the growth rebound among its trading partners. Its trade surplus widened to $15.55 billion in the second quarter, up 148% from the same period a year ago. That’s despite a brief export ban on palm oil in April.
  
  Still, policy makers may tread with caution due to global recession risks sparked by an aggressive monetary tightening in the US and stumbling growth in China. Bank Indonesia recently projected that GDP growth could tilt below the midpoint of its 4.5%-5.3% target range this year amid uncertainty to the global outlook.
  
  Other highlights from the second-quarter GDP data:
  • Fastest-growing sectors were transport and storage at 21.27% year-on-year, followed by food, beverage and accommodation (9.76%), and electricity and gas (9.33%)
  • Government spending shrank 5.24%
  • Gross fixed capital formation expanded 3.07%
  • Imports rose 12.34%
  • 
    
  • — With assistance by Norman Harsono, Eko Listiyorini, Tomoko Sato, Yudith Ho, and Rieka Rahadiana
  
  
  (Updates with more details throughout)
  
  Bloomberg - Are you a robot?

 

[Indos]

PT Pertamina has increased the price of its non subsidy gasoline products many times, the recent one is Today

 

[Bilal9]

@Bilal9 bro, another incredible Indian economist with biased projection........

Asia-Pacific: Indonesia and Hong Kong SAR Q2 GDP

GDP data for Indonesia and Hong Kong SAR are set to dominate APAC releases in the coming week. Our forecasts point to a 3.8% rate of growth (slowing from 5.01% YoY) in Indonesia. More concerningly, in Hong Kong SAR our estimates predict a second consecutive contraction at -0.84% (although slowing from Q1 decline of 4%)

29 July 2022 Chris Williamson Rajiv Biswas Shreeya Patel

Sharing insights elevates their impact

This week sees the release of worldwide manufacturing and services PMI data which will give an insight into global growth, inflation and labour market trends in key economies for the first month of the third quarter

ihsmarkit.com

Very predictable. Only India is progressing in rip-roaring fashion. Other countries are all in the doldrums.

If people don't speak up about these Indian economists faking everything then nothing will happen....and they are paid by Int'l media like Reuters and AP as well as IMF and World Bank to do this....

Not saying all Indian economists are faking Indian progress, but a majority being Modi supporters have this agenda, unfortunately.

Int'l organizations have not wised up to this unfortunately. If things continue like this, then D-8 countries need to have their own economic reporting done and reject IMF and WB forecasts faked by Indian economists.

 

[Indos]

Steady Mrs. Sri Mulyani! State Budget Surplus Again Rp100 T​

NEWS - Cantika Adinda Putri, CNBC Indonesia
11 August 2022 17:33

Jakarta, CNBC Indonesia - The State Budget (APBN) has again recorded a surplus until the end of July 2022. The nominal is even very fantastic, reaching Rp 106.1 trillion or 0.57% of Gross Domestic Product (GDP).

"The state budget has a surplus of IDR 106.1 trillion," said Finance Minister Sri Mulyani Indrawati in a press conference of our state budget, Thursday (11/8/2022).

This achievement completes the seven-month surplus in a row since the beginning of 2022. At the end of June 2022, the surplus has reached IDR 73.6 trillion. The primary balance also had a surplus of IDR 316.1 trillion.

It is known that state revenue reached Rp 1,551 trillion or grew 50.3% (year on year /yoy). In detail, tax revenues of IDR 1,028.5 trillion, customs and excise of IDR 185.1 trillion and non-tax state revenues of IDR 337.1 trillion.

Meanwhile, state spending was IDR 1,444.8 trillion. This includes central government spending of IDR 1,031.2 trillion, consisting of KL expenditure of IDR 513.6 trillion and non-KL expenditure of IDR 517.6 trillion. Especially for subsidies paid of IDR 116.2 trillion and compensation for fuel and electricity of IDR 104.8 trillion.

Transfers to regions and village funds have been realized at IDR 413.6 trillion. The government still has SILPA of IDR 302.8 trillion

"These results show that our state budget is healthy, it has recovered," said Sri Mulyani.

Mantap Bu Sri Mulyani! APBN Surplus Lagi Rp100 T

Anggaran Pendapatan dan Belanja Negara (APBN) kembali mencetak surplus hingga akhir Juli 2022.

www.cnbcindonesia.com

 

[Indos]

ID FOOD distributes MinyaKita to eastern Indonesia through sea toll​

5 hours ago

Illustration: Cooking oil stock at a retail shop in Mataram City, West Nusa Tenggara Province. (ANTARA/Nirkomala/uyu)

The delivery of the cooking oil is also a gift from the food state-owned enterprises (SOEs) for Indonesia's Independence Day (commemorated on August 17).

Jakarta (ANTARA) - State-owned food holding ID FOOD is working on optimizing the utilization of sea toll infrastructure to distribute MinyaKita, affordably priced cooking oil in simple packaging, to the eastern regions of Indonesia to reduce logistic costs.

"We are optimizing the sea toll facility to meet the people's demand for simple packaged cooking oil for Eastern Indonesia (regions), such as Kupang (East Nusa Tenggara Province), Timika (Papua Province), and Merauke (Papua Province)," president director of the holding, Frans Marganda Tambunan, stated here on Thursday.

Tambunan's side has sent 40 containers of MinyaKita, weighing about 669.6 tons, or 744 thousand liters, from Tanjung Priok Port, North Jakarta.

Some 21 containers carrying 351 tons, or 390,600 liters, of the product were delivered to Kupang City, while Timika City and Merauke District received six containers carrying 100.5 tons, or 111,600 liters, and 13 containers with 217.7 tons, or 241,800 liters, respectively.

Related news: Ideal price of cooking oil reached in four islands: Minister

"Delivery of the cooking oil is also a gift from the food state-owned enterprises (SOEs) for Indonesia's Independence Day (commemorated on August 17). We are committed to (realizing) equitable distribution of food to meet the needs of the community," the president director remarked.

He noted that the eastern region of Indonesia still experiences a deficit regarding the commodity.

Earlier, on May 10, 2022, ID FOOD had also distributed 300 tons of cooking oil and 800 tons of sugar using the sea toll facility to Kupang City.

Related news: Minister promises dispatching cooking oil stocks for Papua, Maluku

Transportation Minister Budi Karya Sumadi said that his side provided the sea toll services to make the shipping costs relatively economical and affordable, so that the price of cooking oil set by the government, at Rp14 thousand per liter, could be maintained.

The minister assessed that establishment of the sea toll road was able to facilitate the distribution of goods, which is expected to make the commodity prices equitable throughout Indonesia.


Related news: Government succeeds in maintaining community-level cooking oil prices

According to the Trade Ministry’s data, currently, the national average price of bulk and simple packaged cooking oil has declined to Rp14 thousand per liter.

In fact, the average price in the Java and Bali regions has reached Rp13 thousand per liter. Meanwhile, the average price in the regions of Sumatra, Kalimantan, and Sulawesi has decreased to Rp14 thousand per liter, and in several areas, it has even reached Rp13,500 per liter.

However, the average price of commodities in East Nusa Tenggara, Maluku, and Papua regions is still at around Rp17 thousand to Rp19 thousand per liter.

Hence, Trade Minister Zulkifli Hasan emphasized that intervention steps by various stakeholders, including the Transportation Ministry, SOEs, and the private sector, were deemed necessary to stabilize the price.

"Hopefully, the sea toll cooperation would enable (the people in) Papua, Maluku, and East Nusa Tenggara to enjoy the price of simple packaged cooking oil at Rp14 thousand," he added.

The sea toll facility is a logistics transportation concept launched by the Indonesian government to address the high disparity in commodity prices between the western and eastern regions by operating various container and feeder ships to deliver the goods to hub ports throughout Indonesia.

People's trade activities contribute to economic growth: Vice Minister - ANTARA News

People's trade activities contributed to the national economic growth of 5.44 percent in the second quarter of 2022 as per data released by Statistics ...

en.antaranews.com

 

[Indos]

Almost all Indonesians have antibodies against COVID-19, blood survey shows​

Nina A. Loasana (The Jakarta Post)
PREMIUM
Jakarta ● Sat, August 13, 2022



Almost all Indonesians have developed antibodies against COVID-19, according to the latest serosurvey conducted by the Health Ministry and the School of Public Health at the University of Indonesia in July.

Researchers examined blood samples from 20,501 people in 100 cities across the archipelago and found that around 98.5 percent of them had antibodies against the virus, due to vaccination or past infections. The figure is almost 10 percentage points higher than the 87.8 percent recorded in a previous survey in December which involved the same respondents.

Almost all Indonesians have antibodies against COVID-19, blood survey shows

Almost all Indonesians have developed antibodies against COVID-19, according to the latest serosurvey conducted by the Health Ministry and the School of Public Health at the University of Indonesia in July.

www.thejakartapost.com

 

[Indos]

AlhamduliLLAH​

​

Indonesia current account surplus widens in Q2 to 1.1% of GDP​

19 Aug 2022 11:57AM
(Updated: 19 Aug 2022 11:57AM)

JAKARTA : Indonesia reported a current account surplus of $3.9 billion, or 1.1 per cent of its gross domestic product in the second quarter, much higher than the 0.1 per cent surplus in the previous three months, according to a central bank report released on Friday.

The country also reported a $1.1 billion deficit in its financial and capital accounts, taking the balance of payments to a surplus of $2.4 billion in the April-June period. Indonesia had a $1.8 billion balance of payments deficit in the first quarter.

Source: Reuters

Indonesia current account surplus widens in Q2 to 1.1% of GDP

JAKARTA : Indonesia reported a current account surplus of $3.9 billion, or 1.1 per cent of its gross domestic product in the second quarter, much higher than the 0.1 per cent surplus in the previous three months, according to a central bank report released on Friday.The country also reported a...

www.channelnewsasia.com

 

[Indos]

‘Too low’: Indonesia’s call for optimism doesn’t match 5.3pc growth target, analysts say​

Resty Woro Yuniar - Wednesday

• President Joko Widodo unveils five priorities for 2023, touts 5.44 per cent growth in second quarter of 2022 and 27-month trade surplus run
• Call to remain vigilant amid geopolitical uncertainties could mean a 'more realistic growth target' even as economy on track for stronger recovery next year

Indonesia's target of 5.3 per cent economic growth next year is seen by economists as punching below its weight, as President Joko Widodo warns the nation to remain "vigilant" amid the ongoing global economic turbulence.

During his annual State Budget address on Tuesday, Widodo laid out five economic priorities for next year.

A majority of the state expenses would be dedicated to education, healthcare and social protection, while infrastructure costs would only amount to 392 trillion rupiah (US$26.5 billion), underlining Widodo's shifting budgetary priority in his last full year as leader. The biggest budget allocation, some 811 trillion rupiah (US$54.9 billion), will be distributed to the country's 37 provinces.

Widodo also touted the trillion-dollar economy's achievements this year, such as its 5.44 per cent economic growth in the second quarter and the trade surplus it has recorded for 27 consecutive months. Inflation, at 4.9 per cent year-on-year, is still deemed under control, due to a whopping 502 trillion rupiah (US$34 billion) in energy subsidies and other measures.

But Eko Listyanto, deputy director at Jakarta-based Institute for Development of Economics and Finance, said Widodo's call to be optimistic next year was not reflected in his "moderate" growth target of 5.3 per cent.

"It's not optimistic enough. Our growth target this year is set at 5.2 per cent, so the 5.3 per cent target next year, in Jokowi's last full year as a president, is too low," Eko said, referring to Widodo's popular nickname.

"Jokowi also called for us to be more vigilant, due to the threat of global food crisis and other risks, so I think that's why he had to set a more realistic growth target."

Indonesia's youth optimistic about prospects amid economic recovery​

Widodo said a nickel downstreaming project, part of Indonesia's efforts to do away with selling raw minerals to providing value-added goods, had boosted steel export value to 306 trillion rupiah last year, up 18 times compared to the previous seven years. It is expected to jump to 440 trillion rupiah next year.

"Moving forward, we have to stay vigilant. The risks from global economic turbulence remain high. The slowdown of the global economy continues to have the potential to affect the rate of short-term national economic growth," Widodo said.

While geopolitical uncertainties - such as the war in Ukraine, which has disrupted supplies and caused a surge in prices - could affect Indonesia's economic momentum, Widodo said it should "give no room for pessimism".


Fithra Faisal, economist and executive director at Next Policy, a Jakarta-based think tank, cautioned the government against setting a "really aggressive fiscal stimulus" to boost Southeast Asia's biggest economy, as it is on track for a stronger recovery next year.

Indonesia's budget deficit for 2023 is projected at 2.85 per cent of gross domestic product (GDP).

"Today's economic activities are pretty much independent, it can grow on its own without the government's aggressive fiscal stimulus. This year, with a trade surplus, I think we can keep the state budget deficit below 3 per cent of GDP, we don't have to wait until next year to achieve that," Fithra said.

Analysts generally agree the ongoing geopolitical dynamics, particularly in the Taiwan Strait, could mar Indonesia's economic growth target, with Fithra warning of a "catastrophic impact" if tensions between China and Taiwan worsen next year.

‘Too low’: Indonesia’s call for optimism doesn’t match 5.3pc growth target, analysts say

 

[Indos]

The increase of logistic rate is one of them enjoyed by containerships, bulk carriers, and oil and gas tankers companies. So far Indonesia containership/bulk carrier in majority only serve Indonesia market and for international route is only serving as feeder containership with Jakarta-Singapore, Belawan-Singapore route. Indonesia has around 150 ships for carrying coals where in majority just serves for domestic market and feeder business.

The one that has already been go international is Samudera Indonesia and they are ready to carry coal into Europe if there is demand for that. State owned Pertamina in the other hand enjoyed their oil and gas tankers business just like revealed by Greenpeace when Pertamina tanker bring Russian oil into China.

Samudera Indonesia President Director, Bani Maulana, explain about the opportunity to bring Indonesian coal into Europe using the company ships.

 

[Indos]

Indonesia reaffirms plan to establish bullion bank​

The government has reiterated a plan to create a bullion bank to reduce dependence on foreign service providers.(AFP/Daniel Roland)


Wike D. Herlinda (The Jakarta Post)
PREMIUM
Jakarta ● Mon, August 22, 2022

The government has reiterated a plan to create a bullion bank by merging Bank Rakyat Indonesia (BRI) and PT Pegadaian in a bid to end Indonesia's dependence on parking gold reserves in Singapore.

A bullion bank offers all types of gold or silver transactions, including services for exporting and importing as well as storing precious metals. Many global banks provide such services, including JP Morgan, HSBC, UBS and Credit Suisse.

Indonesian gold industrialists have long faced obstacles in managing their reserves domestically due to the absence of a bullion bank.

Indonesia reaffirms plan to establish bullion bank

The government has reiterated a plan to create a bullion bank by merging Bank Rakyat Indonesia (BRI) and PT Pegadaian in a bid to end Indonesia's dependence on ‘parking’ its gold reserves in Singapore.

www.thejakartapost.com

 

[Indos]

Jokowi thinks too much, it is clear his economic team wants the gasoline and solar to increase soon.

My suggestion

We need to increase Pertalite price at least until Rp 10.000 per liter
We need to ban any cars respective whether it is luxury cars or not from consuming Pertalite
We need to increase Pertamax price until its reach its economic price and the subsidy should be zero for this type of gasoline (I suggest some tax for this type of gasoline and the money can be used to accelerate the EV car infrastructure, the same type produced by foreign oil companies like Shell should be taxed as well)

-------------------------

We need to subsidize more poor people families for their kids education and also see poor family with little kids whether some food and milks can be given to them regularly until the kids old enough.

Some money saved can be used to fund another infrastructure project and inject into SOE for them to expand their business whether in agricultural or industry, then the project local content should be high, poor families usually work as construction workers, more construction projects means more money given to poor people families while the projects are also positive for our economic development and people welfare who use the infrastructure

---------------------------

Inflation (negative impact of raising gasoline price)

Inflation will increase of course, but increasing the price of Pertalite into Rp 10.000 will not likely increase the inflation too much, it is still bearable. Indonesia economies are already quite competitive with many businesses, it is not easy for businesses to hike their product and services too much.

Jokowi is also a businessman, I believe he knows that in the business mind competition is the most important factors in term of determining product/service price, as we learn in economic class and through logical thinking, perfect competition market will not easily to raise prices and Indonesia has huge micro and medium businesses. Big companies with monopolistic market type can be intervened with more support to SOE like current policy to increase more planes for Garuda and Citilink to avoid the plane tickets too expensive.

Not increasing the price and rather improving efficiency is also another type of strategy used by companies to survive in the business. Many businesses in Indonesia I believe will chose this strategy at this moment as we are still in the phase of economic recovery.
.

Sri Mulyani: Subsidi BBM Mayoritas Dinikmati Orang Kaya

Anggaran subsidi dan kompensasi energi yang mencapai Rp 502,4 triliun dinikmati sebagian besar oleh orang kaya.

www.cnbcindonesia.com

 

[Indos]

Indonesia considering hiking fuel prices as much as 40%, say lawmakers​

JAKARTA, Aug 26 (Reuters): Indonesia may raise subsidised fuel prices by 30% to 40% to manage fiscal pressure from a ballooning subsidy budget, lawmakers from President Joko Widodo's ruling coalition government told Reuters on Friday.

Eddy Soeparno, a member of the National Mandate Party and deputy head of the parliament's energy committee, said he obtained the information in a closed-door parliamentary meeting with state oil company Pertamina earlier this week.

Southeast Asia's largest economy has already tripled its 2022 energy subsidy allocation from its original budget to 502 trillion rupiah ($33.90 billion) - about 16% of total spending plans - amid rising global oil prices and a depreciating rupiah.

The government has said even more money would be needed for subsidies this year if fuel prices were not increased.

The option Pertamina preferred was to raise 90-octane gasoline prices to 10,000 rupiah (67.5 U.S. cents) per litre from 7,650 rupiah; 92-octane gasoline to 16,000 rupiah per litre from 12,500 rupiah; and diesel to 7,200 rupiah per litre from 5,150 rupiah, Eddy said in an interview on Friday.

Pertamina also backed introducing some sales restrictions such as banning vehicles with larger engine capacities from purchasing subsidised fuels, he said.

"We see this (raising prices and restricting sales) as having the least detrimental effects for the people," Eddy said.

The price increase is estimated to add around 1.9 percentage points to the 2022 inflation rate, Eddy said.

Indonesia's inflation reached 4.94% in July, its highest in seven years, holding well-below rates seen in more advanced countries largely due to its fuel subsidies.

Sugeng Suparwoto, the chair of parliament's energy committee, confirmed details from the Pertamina meeting in a phone interview.

"We seek to maintain inflation at 7% until the end of the year," he said, adding that cash handouts would be provided to cushion the impact of any fuel price increases on the purchasing power of Indonesia's poor.

Irto Ginting, corporate secretary of Pertamina's retail distribution unit, declined to comment about the proposed price hikes, but noting that pricing decisions are for the government to make.

Officials with energy and economic ministries and the presidential palace did not immediately respond to requests for comment.

Chief economic minister Airlangga Hartarto said earlier this week he would present all policy options this week to Jokowi, as the Indonesia president is widely known.

Indonesia's relatively low inflation has allowed the central bank to delay raising interest rates until this week, well behind its regional and global peers.

Some economists said Bank Indonesia's 25-bp rate hike, its first since 2018, was to front-run the announcement of the fuel price increase.

Other options being considered for price increase include setting 90-octane gasoline - Indonesia's most popular fuel - at 9,500 rupiah a litre and the other fuels also below Pertamina's preferred price points, Eddy said.

The price levels under consideration remain below refinery production costs previously given by the energy ministry, implying some level of subsidies. - Reuters

Indonesia considering hiking fuel prices as much as 40%, say lawmakers

Indonesia may raise subsidised fuel prices by 30% to 40% to manage fiscal pressure from a ballooning subsidy budget, lawmakers from President Joko Widodo's ruling coalition government told Reuters on Friday.

www.thestar.com.my