JLL Jakarta Property Briefing Q4 2011
Summary
- The year 2011 was a bright one for Indonesia, marked by positive news surrounding the country’s economy and political stability. The performance of domestic and private consumption has stayed intact, while investment inflows remained strong.
- Indonesia also posted steady growth of 6.5% in GDP on the back of buoyant domestic spending and private investment.
- Inflation in 2011 continued to decrease, thanks to the government’s efforts to keep it relatively low. By end-December, inflation was about 3.79% y-o-y, falling from the 4.61% recorded at end-September.
- The decrease in inflation during 4Q11 was mainly driven by a correction in volatile food prices and the absence of inflationary pressures from administered prices, while core inflation remained moderate.
- Over the next two years, the Central Bank set the inflation target at around 4.5%±1% for 2012 and 2013.
- Concerns over the global outlook had somehow prompted the Central Bank to make a series of moves to protect the economy this year, including cutting the benchmark rate to a record low of 6% in November after a cut to 6.5% in October from 6.75% at end-September.
- The Rupiah value has depreciated as Europe’s crisis deterred investors from emerging market assets. At end-December, the Rupiah was IDR 9,068 against the US Dollar.
- Investment value increased as reflected both in domestic and foreign investment (FDI value). Investments in infrastructure developments, factories and office establishments, or certain financial investment schemes, continued to grow.
- Global economic growth is predicted to experience a slowdown in line with the uncertainty in the resolution of financial problems in the Eurozone and the US, which is predicted to affect domestic economic growth.
- Indonesia’s economic growth is forecast to decelerate to around 6.3-6.7% in 2012, mainly driven by lower export performance and the
decrease in international commodity prices. Growth is expected to start accelerating in 2013 at around 6.4-6.8%, aligned with an improving global economy.
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- Indonesia also posted steady growth of 6.5% in GDP on the back of buoyant domestic spending and private investment.
- Inflation in 2011 continued to decrease, thanks to the government’s efforts to keep it relatively low. By end-December, inflation was about 3.79% y-o-y, falling from the 4.61% recorded at end-September.
- The decrease in inflation during 4Q11 was mainly driven by a correction in volatile food prices and the absence of inflationary pressures from administered prices, while core inflation remained moderate.
- Over the next two years, the Central Bank set the inflation target at around 4.5%±1% for 2012 and 2013.
- Concerns over the global outlook had somehow prompted the Central Bank to make a series of moves to protect the economy this year, including cutting the benchmark rate to a record low of 6% in November after a cut to 6.5% in October from 6.75% at end-September.
- The Rupiah value has depreciated as Europe’s crisis deterred investors from emerging market assets. At end-December, the Rupiah was IDR 9,068 against the US Dollar.
- Investment value increased as reflected both in domestic and foreign investment (FDI value). Investments in infrastructure developments, factories and office establishments, or certain financial investment schemes, continued to grow.
- Global economic growth is predicted to experience a slowdown in line with the uncertainty in the resolution of financial problems in the Eurozone and the US, which is predicted to affect domestic economic growth.
- Indonesia’s economic growth is forecast to decelerate to around 6.3-6.7% in 2012, mainly driven by lower export performance and the
decrease in international commodity prices. Growth is expected to start accelerating in 2013 at around 6.4-6.8%, aligned with an improving global economy.
To download the full report, please click here.