Indonesia’s economy has posted robust growth in 2008 and one of the rare countries which successfully posted a positive growth rate in 2009, navigating through the global financial turmoil and economic slowdown. For the whole 2009, the economy charted fairly vigorous growth at 4.5% (yoy) and it is projected at5.5% in 2010.
Banking industry is in stable condition with high level of CAR (17.4%) and comfortably safe level of NPL (gross) at a 3.8% (as of December 2009 data).
By the end of Q4-2009, Indonesia's overall balance of payments recorded a surplus of US$4.0 billion larger than a surplus of US$3.5 billion in the preceding quarter, resulted from surpluses in both the current account as well as the capital and financial account.
International reserves reached to USD69.7 billion as of end of February 2010, equivalent to about 5.7 months of imports and official external debt payment.
In 2009, Rupiah has been showing an appreciation trend, mainly supported by continuing of global economic recovery and positive economic performance which outperformed regional economy. Rupiah strengthened from IDR 10,950 against USD as on December 31, 2008 to IDR 9,400 against USD as on December 31, 2009, representing 16.5% appreciation. Continue in 2010, Rupiah strengthened at the level of IDR 9,335 against USD as of end of February.
Monetary relaxation during 2009 has provided ample support for the economic recovery and bank intermediation processes. At the latest Board of Governors Meeting convened in March2010, The BI rate decided to be kept at 6.50% after concluding the present level of the BI Rate is consistent with achievement of the 2010 inflation target, set at 5%±1%. In the balance of risk, the probability of renewed inflationary pressure is low, at least during the first half of 2010. The BI Rate is also seen as favorable to boost economic recovery, maintain financial system stability and promote the banking intermediation function.
The Indonesian economy in 2009 has charted remarkably low inflation. In 2009, the Consumer Price Index (CPI) recorded annual inflation at 2.8% (yoy). Inflationary pressure eased in February 2010 in line with the drop in inflationary pressure from volatile foods (led by rice), minimum inflation from administered prices and modest inflation expectations. In February 2010, monthly inflation arrived at 0,3% (mtm) or 3,81% (yoy). However, we are confident Inflation in 2010 will stay within the target range of 5%±1%.
With the fiscal deficit target of 1.6% of GDP in 2010, Government continues to maintain the balancing act to support the recovery and to anticipate the global growth momentum going forward by improving public infrastructure and energy. In the medium term, fiscal policy is directed toward maintaining fiscal consolidation while at the same time sustaining fiscal stimulus.
(Source: Investors relations unit-Bank Indonesia)