August 2013

OFFICE OF CHIEF ECONOMIST

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C Co on nt te en nt ts s

Structural Repairs to Maintain
Economic Momentum
p.02
Current Account Deficit Surged in
2Q13; Revising Our Rupiah
Forecast
p.06
New Policy Package: More on the
Structural Reform
p.10
Beyond Cabotage: Opportunities
and Challenges of Shift from
Export FOB to CIF
p.13
Mandiri Leading Economic
Indicator
p.38
Mandiri Banking Pressure Index p.40
Indonesia Current Data (Table) p.43

C Ch hi ie ef f E Ec co on no om mi is st t
Destry Damayanti
destry.damayanti@bankmandiri.co.id

A An na al ly ys st t
Faisal Rino Bernando
Andry Asmoro
M. Ajie Maulendra
Nadia Kusuma Dewi
Nurul Yuniataqwa Karunia
Sindi Paramita
Reny Eka Putri
Andrian Bagus Santoso
Adjie Harisandi
Mamay Sukaesih
Romauli Panggabean
Rully Arya Wisnubroto

P Pu ub bl li ic ca at ti io on n A Ad dd dr re es ss s: :
Bank Mandiri Head Office
Office of Chief Economist
18
th
Floor, Plaza Mandiri
Jalan Jend. Gatot Subroto Kav.36-38
Jakarta 12190, Indonesia
Phone: (62-21) 524 5516 / 5272
Fax: (62-21) 5210430

E Em ma ai il l: :
rino.bernando@bankmandiri.co.id
andry.asmoro@bankmandiri.co.id
ajie.maulendra@bankmandiri.co.id
nadia.dewi@bankmandiri.co.id
nurul.karunia@bankmandiri.co.id
sindi.paramita@bankmandiri.co.id
reny.putri@bankmandiri.co.id
andrian.bagus@bankmandiri.co.id
adjie.harisandi@bankmandiri.co.id
mamay.sukaesih@bankmandiri.co.id
romauli.panggabean@bankmandiri.co.id
rully.wisnubroto@bankmandiri.co.id


S Se ee e i im mp po or rt ta an nt t d di is sc cl la ai im me er r a at t t th he e e en nd d o of f
t th hi is s m ma at te er ri ia al l
Structural Repairs to Maintain Economic Momentum
No country in this world can escape from the world economic slowdown. Indonesia
is one of them, thus, eventually we should be able to be high-minded to accept the
fact that our economic growth is below 6% again after our last experience in 2009.
The latest data released by the Central Statistics Agency (BPS) showed that
Indonesias economic growth in the second quarter of 2013 slowed to 5.8% yoy
compared to 6.02% in the first quarter of 2013. However, when compared to other
developing countries, Indonesia is proved to still have a relatively stable economic
growth.
Current Account Deficit Surged in 2Q13; Revising Our Rupiah
Forecast
Balance of payment (BoP) improved in 2Q13, yet current account deficit soared on
the back of deterioration in non-oil and gas trade and services accounts. BoP deficit
eased to USD 2.5 bn from a deficit of USD 6.6 bn in 1Q13 on the back of significant
capital account surplus of USD 8.2 bn from deficit of USD 0.3 bn in the corresponding
period. Meanwhile, current account deficit continued to worsened to USD 9.8 bn
(4.4% of GDP) from USD 5.8 bn (2.6% of GDP).
New Policy Package: More on the Structural Reform
The government announced fiscal measures that aim to address current account
deficit, maintain economic growth, stabilize inflation, and boost investment, which
we think will address more on the longer term structural problem.
Beyond Cabotage: Opportunities and Challenges of Shift from Export
FOB to CIF
One of causing factors on current account deficit is services account deficit. Share of
services account deficit to current account deficit is 35.4% in first half 2013. Services
account continue to deficit with an average deficit USD 2.6 bn per quarter.
Transportation service is main causing of services account deficit which contributes
78.7% of services account deficit in first half 2013. Freight greatly affect
transportation services account deficit especially imports of foreign transportation
services. Using of foreign freight very monopolized in Indonesias export import.
Hence, increasing of export will make transportation services account deficit.

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-2.019
-2.303
-2.196
-2.414
-1.780 -1.627
-1.616
-1.546
-1.219
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-2.972 -2.549
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Passenger Goods Others Transportation Services Account
-711
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Transportation Services Account Export (RHS)
Transportation Services Account
By Component
Transportation Services Account
and Export
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Structural Repairs to Maintain Economic Momentum
Destry Damayanti (destry.damayanti@bankmandiri.co.id)


No country in this world can escape from the world economic
slowdown. Indonesia is one of them, thus, eventually we
should be able to be high-minded to accept the fact that our
economic growth is below 6% again after our last experience
in 2009. The latest data released by the Central Statistics
Agency (BPS) showed that Indonesias economic growth in the
second quarter of 2013 slowed to 5.8% yoy compared to
6.02% in the first quarter of 2013. However, when compared
to other developing countries, Indonesia is proved to still have
a relatively stable economic growth. This is indicated by the
standard deviation of economic growth during the period
2007 to 2012, in which Indonesia reached 0.7, while Thailand
at 5.9, Malaysia at 3.7, Philippines at 2.4, India at 2.2 and
China at 1.6. Implicitly, this proves that Indonesia still has a
strong resistance to the global economic turmoil, although the
growth trend continues to slow since 2012.

Nevertheless, should we be satisfied with this situation? Of
course not, because if we actually analyze our economy
further, many things need to be our concern if we do not want
to let the economy continue to slide downward. Some
problems arising in our economy today are actually more
structural, such as high inflation, trade deficit because of
rapid import growth and under-pressure exchange rate having
depreciated by 6.7% to date compared to the value at the
beginning of the year. Therefore, the handling could not be
ad-hock and partial, but it should be comprehensive and
sustainable. Lets do one-by-one analysis on structural
problems faced by Indonesia today.

Inflation is more driven by non-monetary phenomena. Seen
from the driving source of inflation, it is apparent that the
inflation in Indonesia is currently more driven because of
inflation in the volatile foods and administered goods. While
core inflation is relatively stable, even when the total inflation
in July reached 8.6% yoy, core inflation remained stable at the
level of 4.4% yoy. Inflation, which is mostly due to supply side
rather than the demand side, indicates that it takes
appropriate handling for the supply side of our economy. Our
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food security needs reinforcement through the development
of a more productive agriculture and agro-industry that can
compete with similar products from neighboring countries.
Thus, the problem will not be resolved only by opening the
import channel. Furthermore, high volatility due to significant
changes in the administered goods, particularly fuel price, may
begin by starting to bring domestic fuel price closer to the
global market price, so that it also can improve the efficiency
in the use of domestic fuel.

Current account (CA) deficit is more structural. The implication
is that the handling may take longer and comprehensive time
and involves more relevant agencies. Worsening of the
current account has been felt since 2010 and its peak occurred
in 2012, where CA was in a deficit of USD24.1 bn or 2.7% of
GDP. Worsening of our CA actually happened when our
economy was experiencing expansion, with an average
economic growth of 6.3% in the period and investment by
9.1%. The structure of our manufacturing sector, which is less
competitive and not progressing significantly, is unable to
compensate for rapid economic growth. As a result,
dependence on imported raw materials increased to 77% of
total imports and trigger CA deficit. As an illustration, if in
2002 the manufacturing sector contribution was still about
30% of GDP, in the second quarter of 2013 the contribution
was down at only 24% of GDP. Therefore, the development
strategy of the manufacturing industry, which also includes
industry downstreaming, is very important to reduce our
dependence on imported raw materials while enhancing the
competitiveness of our non-commodity exports. In addition,
the development of the industrial sector will reduce
unemployment in Indonesia, which is currently at the level of
6.1%, as this is the third largest sector of main employment,
after agriculture and trade. The government must have a
Master Plan of manufacturing industry development and
obviously a full commitment to apply it. Thus, in the future
our CA will be better along with the growth of our economy
and the global economic recovery.

Poor investment climate in Indonesia. Indonesias current
global competitiveness index is still ranked 50 out of 144
countries, below Malaysia (25) and Thailand (38). The study
conducted by the World Economic Forum (2012) identifies
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four main factors that cause low competitiveness of Indonesia
compared to other countries, namely Bureaucracy,
Corruption, Infrastructure and Labor Markets. Complicated
bureaucracy, particularly in terms of licensing, often creates
business uncertainty and this has become the main complaints
of investors in Indonesia. In relation to corruption issue,
although now we see the incessant efforts of Corruption
Eradication Commission (KPK) in combating corruption, it
seems to not deter corruptors in Indonesia. Thus, full support
to KPK needs to be improved, both in terms of staffing and
infrastructure compliance of KPK. Another important issue is
the relatively poor quality of infrastructure in Indonesia. Poor
intra-region connectivity in Indonesia causes logistic costs in
Indonesia the most expensive in the region, reaching 27% of
GDP, as compared to India (13%), China (18%) and Vietnam
(25%). Furthermore, another major issue is labor, in relation
to labor policies and quality. Currently, nearly 50% of the
countrys labor only completed primary school, while only
9.2% graduated from senior high school and above. Therefore,
improvement in labor education, both formal and informal, is
important in order to have productive and reliable labor.

The frequently volatile exchange rate. As an open economy
country, Indonesian exchange rate should be moving in
accordance with economic fundamentals and global economic
developments. It is highly required in order to avoid over-
value or under-value of Rupiah exchange rate, which can lead
to imbalances in the external sector, thus disturbing the
macro equilibrium. Under a condition in which we are facing a
pressure on permanent CA deficit, the pressure of Rupiah
depreciation will increase. Rupiah depreciation may be
minimized by capital inflows, both portfolio and foreign direct
investment (FDI). However, the rapid inflow of foreign capital
will also depend on global economic conditions. Assuming that
the future global liquidity will increasingly be reduced in line
with Central Bank policies of developed countries that are
starting to normalize their monetary policies, we cannot
expect huge capital inflows in the future. Therefore,
preserving the macro equilibrium requires an exchange rate as
per the fair-value and most importantly maintaining Dollar
liquidity so as not to cause panic of businesses.

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From the foregoing, it is apparent that the problems faced by
Indonesia are more structural than temporary. Therefore, the
handling should be comprehensive and sustainable. That is,
we might not rely solely on monetary or fiscal policy alone to
address imbalances in the external sector. It also takes real
sector policy and concrete actions and commitments of
various parties, the government, regulators and businessmen,
to implement the real sector policy. For example, to curb
inflation, it may not only be done by a policy of raising interest
rate, because it can be counter-productive to our domestic
economy.

In the medium term, growth of our economy is at a rate of 6%
-6.5%, which seems highly possible with the support of strong
domestic economy, the dominance of the number of young
and productive age population, the growth of middle-income
groups, and abundant natural resources. Nevertheless, in the
absence of economic changes and improvements structurally,
Indonesia could lose the growth momentum. Do not let go
what we have in hand vanished in vain.
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Current Account Deficit Surged in 2Q13; Revising Our Rupiah
Forecast
Aldian Taloputra (aldian.taloputra@mandirisek.co.id)
Leo Rinaldy (leo.rinaldy@mandirisek.co.id)
Wisnu Trihatmojo (wisnu.trihatmojo@mandirisek.co.id)


Balance of payment (BoP) improved in 2Q13, yet current
account deficit soared on the back of deterioration in non-oil
and gas trade and services accounts. BoP deficit eased to USD
2.5 bn from a deficit of USD 6.6 bn in 1Q13 on the back of
significant capital account surplus of USD 8.2 bn from deficit of
USD 0.3 bn in the corresponding period. Meanwhile, current
account deficit continued to worsened to USD 9.8 bn (4.4% of
GDP) from USD 5.8 bn (2.6% of GDP) (see figure 1).

Current account deteriorated on trade account, mainly
driven by seasonal factors It was mainly perpetuated from
sluggish trade performance as it posted a deficit of USD 0.6
bn, the lowest in 30 years, from a surplus of USD 1.6 bn in the
previous quarter. Non-oil and gas imports rose by USD 4 bn in
2Q13 while similar exports only by USD 1 bn as limited by
lower commodity prices. Oil and gas trade balance improved
in 2Q13 but remained in deficit of USD 5.3 bn. We see that
seasonally high import demand on food and less durable
consumer goods have contributed to the deficit (see figure 2 &
3). These commodities shared more than half of 2Q13
quarterly growth. Historical data shows these import tend to
increase ahead of the festive season (by an average of 27%
qoq) and drop in the quarter after (by an average of 4% qoq).
Moreover, larger overseas freight service and income
repatriation have also contributed to widening deficit.

while capital account recorded a significant turnaround.
Despite repositioning trend in global fund and sluggish global
economic growth, the net foreign inflow continued to be solid
as led by FDI and other investment flow. FDI inflow rose to
USD 4.2 bn in 2Q13 which constituted more than half of net
capital inflow in the quarter. Meanwhile, other investment
increased to a surplus of USD2.3 in 2Q13 from a deficit of USD
7.0 bn in 1Q13. Surplus in other investment was triggered by
withdrawal of banks overseas placement to meet on-shore
USD demand (i.e. imports, income repatriation) and
placement in central bank facility/instrument such as term
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deposit and currency swap. Otherwise, portfolio inflow eased
to USD 2.5 bn (vs. USD 2.8 bn in 1Q13), on the back of selloff
in stock market despite government global bond issuance
amounting USD 2.7 bn.

Currency pressure is likely to linger in the near term.
Widening current account deficit in the last quarter and
higher-than-expected fall in Jul13 FX reserves could trigger
negative sentiment to the rupiah. BI policy to tolerate wider
room of rupiah depreciation as means to stabilize the currency
and to address deficit in current account will also lead to
weaker currency. Furthermore, the uncertainty in external
factor will pose another risk to the currency in the near term.
The unfavorable situation rising from stronger recovery in
advanced economy compared to slowing emerging market not
only led to higher required rate of return of investment, but
also to worsen countrys trade position given its position as
the regional commodity suppliers. China economy hard
landing and its repercussion effect would be the biggest risk.
Based on our estimate, 1% slowdown on Chinas economy
could reduce Indonesias export by 4ppt.

Yet, pressure on the currency is likely to ease towards end of
the year; we revise our rupiah forecast to IDR10,500/USD
and IDR10,400/USD in 2013 and 2014 respectively, from
IDR9,780/USD and IDR9,830/USD. Despite short term
pressure, we expect the rupiah to stabilize in 4Q13. Several
factors will likely support our view.

First, high import pressure in 2Q13 is mainly seasonal; hence,
non-oil and gas import should normalize and decline this
quarter. Second, we think the benefit of subsidized fuel price
hike will be optimum after peak fuel consumption in religious
period diminishes. Our estimate shows that the recent
subsidized fuel price hike will help to lower current account
deficit by 0.2% of GDP. Third, the impact of 75bps interest rate
hike will be passed-through to the already weak economic
growth environment. Higher cost of production (in terms of
energy, wages and lending rate) will likely contribute to
smaller profit margin for producers that at the same time face
tighter industry competition. Fourth, the impact of weaker
currency will likely to support current account balance that
makes imports less attractive. Overall, we expect current
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Raw material imports
(qtq %)
Food and beverages, primary, mainly for industry
Food and beverages, processed, mainly for industry
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Import of Consumer goods (qtq %)
Primary food and beverages, mainly for consumer
Processed food and beverages, mainly for consumer
account to record deficit 3.1% of GDP (i.e. deficit 3.5% of GDP
in 1H13) and deficit 2.7% of GDP in 2013 and 2014, smaller
than our initial estimate of 2.1% and 1.9%, respectively.



















US$ bn 1Q12 2Q12 3Q12 4Q12 FY12 1Q13 2Q13
Current account 3,164 (8,176) (5,264) (7,827) (24,431) (5,819) (9,848)
Goods 3,810 818 3,190 801 8,618 1,602 (601)
Non-oil & gas 4,694 1,974 3,968 3,221 13,857 4,457 1,662
Oil (5,278) (5,331) (4,222) (5,605) (20,436) (6,356) (5,262)
Gas 4,394 4,176 3,443 3,185 15,197 3,501 2,998
Services (1,983) (2,790) (2,359) (3,198) (10,331) (2,480) (3,070)
Income (6,048) (7,101) (6,955) (6,643) (26,478) (6,044) (7,140)
Current transfer 1,058 898 861 1,213 4,029 1,102 962
Capital and financial account 2,096 5,087 5,885 12,080 25,148 (328) 8,199
Capital account 5 3 8 22 37 1 2
Financial account 2,091 5,085 5,878 12,058 25,111 (329) 8,196
Direct investment 1,550 3,747 4,539 4,146 13,982 3,876 3,324
Abroad (2,932) 452 (1,391) (1,551) (5,422) (206) (902)
In Indonesia 4,482 3,295 5,930 5,697 19,404 4,083 4,226
Portfolio investment 2,628 3,873 2,516 190 9,206 2,760 2,529
Assets (457) (185) 31 (4,855) (5,467) (965) (658)
Liabilities 3,085 4,058 2,485 5,045 14,673 3,726 3,187
Other investment (2,087) (2,535) (1,177) 7,722 1,922 (6,966) 2,343
Assets (3,487) (2,724) (698) 1,556 (5,353) (6,779) 3,619
Liabilities 1,400 189 (479) 6,166 7,275 (187) (1,276)
Total (1,068) (3,088) 621 4,252 717 (6,147) (1,650)
Net error & ommission 34 277 213 (1,027) (503) (468) (827)
Overall balance (1,034) (2,811) 834 3,225 215 (6,615) (2,477)
Foreign exchange reserve position 110,493 106,502 110,172 112,781 112,781 104,800 98,905
In months of imports and government external debt payment 6.2 5.8 6.1 6.1 6.1 5.7 5.4
Current account (% of GDP) (1.50) (3.70) (2.40) (3.60) (2.80) (2.60) (4.40)
Figure 1. Balance of payment summary. (Source: Bank Indonesia)



Figure 2. Food import rose ahead of the festive season. (Source: Bank Indonesia)



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Import of Consumer goods (qtq %)
Semi-durable consumer goods Non-durable consumer goods
Figure 3. The same trend is seen in other consumer goods imports. (Source: Bank Indonesia)



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New Policy Package: More on the Structural Reform
Aldian Taloputra (aldian.taloputra@mandirisek.co.id)
Leo Rinaldy (leo.rinaldy@mandirisek.co.id)
Wisnu Trihatmojo (wisnu.trihatmojo@mandirisek.co.id)


The government announced fiscal measures that aim to
address current account deficit, maintain economic growth,
stabilize inflation, and boost investment, which we think will
address more on the longer term structural problem.

The first package is to tackle the current account deficit
problem. The government detailed this package in four
action steps. One, to push export by giving additional tax
deduction to labor intensive sector which export minimum
30% of total production. Two, to reduce fuel import by
increasing the level of biodiesel composition in diesel fuel.
Three, to increase tax rate for luxury goods (CBU cars and
branded goods) from an around 75% to 125% - 150%.
Four, to improve mineral goods export by relaxing
procedure related to quota and quicken the renegotiation
of work contract in mining sector.
The second package is to maintain economic growth
momentum. The government ensures this years budget
deficit will be kept at 2.38% of GDP while in the same time
securing its financing need. In order to prevent potential
lay-offs, the government will provide tax incentive for
labor intensive industry and maintain minimum wage to
be in line with the increase in regional decent cost of
living, which will help to avoid layoffs in the future. It will
also introduce relaxation in facility restriction to the
bonded area for domestic products.
The third package is to maintain consumers purchasing
power and lower inflation. In this context, the
government will strengthen its coordination with Bank
Indonesia to contain inflation volatility. In addition, the
government is planning to change trade procedure for cow
meat and horticulture import goods, from quota system to
price mechanism.
The fourth package is to speed up investment. The
government will empower integrated service system or
one stop permit for investment and speed up the revision
for negative investment list (DNI). It will also hasten
investment program for agro, CPO, cacao, bauxite, and
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rattan by giving tax holiday and allowance. As an example,
the government has formulated to simplify investment
permits on the upstream industry for oil and gas from 69
to only 8. The government will also speed up strategic
investment such as power plant and steel factory.

Monetary measures are aimed to increase the supply of USD
in the market. Bank Indonesia has also today announced new
measures to complement its recently released macro-
prudential policies and government fiscal policies announced
earlier. In summary, we see that they serve to loosen the
regulation of FX transaction, which aim to increase the supply
of USD in the market instead of tightening monetary policy.
Below are the policies:

Extending USD term deposit tenor from currently 7, 14,
and 30 days to 1 day until 12 months. The purpose is to
meet commercial banks placement horizon need and thus
will lengthen USD absorption through the instrument.
Relaxing FX buying by exporters that have converted
their export proceed in the first place. The exports
repatriation document can be used as the underlying
document to buy USD later on. We think this policy aims to
encourage exporters to convert their dollar, since the
current regulation only requires repatriation without any
conversion.
Adjusting BIs FX swap transaction to include not only
swap with the bank itself but also allowing it to pass-on
counterpart swap position. The policy, we think, is to
open hedging opportunity and deepen the forward
transaction. Thus, it may lessen rupiah pressure on the
spot market.
Relaxing external debt regulation, which now excludes
foreigners rupiah current account (VOSTRO) that pools
proceed from direct and portfolio divestment in
calculating maximum net open position (NOP). Initially, it
is included in calculating banks NOP that is capped at a
maximum of 30% of capital. This regulation will help to
lessen demand for USD on foreign divestment, as it
allowed to hold higher rupiah deposit in bank.
Introducing BI deposit certificate (SDBI). SDBI offers to
help commercial bank manage its liquidity. The tradable
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nature of the instrument will help to ease liquidity risk
should there is liquidity shortage in the banking system.

Our view: We think the packages are positive gesture to
address the structural reform yet some of them are more
beneficial as medium and longer term reform. Some of the
quick win policy on current account deficit will have limited
impact in the short term and require some time for
implementation, in our view. The government planning to
increase the portion of biodiesel will indeed help to lower
imported portion of the fuel. The policy will help to lower
imports by USD 0.5 bn (0.1% of GDP) for the remainder of the
year assuming USD 1.5 bn USD 2 bn annual saving.
Furthermore, inadequate bio-fuel production capacity may
also limit short-term impact. The impact of higher luxurious
import VAT on cars, for instance, is also likely to be limited
given small portion of sales, despite its expensive price. To be
specific, cars with >3,000 cc for gasoline and >2,500cc for
diesel, which are likely affected by the regulation, is only 0.3%
of total car sales. Overall, the effectiveness of the policy
package impact will depend on the programs
implementation, thus further explanation on its applicability
may help to create positive sentiment in the short-term.

Nevertheless, we maintain our view that current account
would improve in 2H13. Slower economic growth, lower fuel
imports driven by subsidized fuel price hike, weaker currency,
and higher interest rate will eventually be transmitted to
lower current account deficit in 2H13. The government
indicated that fuel consumption growth has slowed to 4% yoy,
lower than normal consumption growth of 6%-7%.
Accordingly, we estimated current account deficit to be
around 3% in 2Q13, higher than BIs estimate of 2.7% of GDP.
Therefore, we still expect the rupiah to stabilize to around
IDR10,500/USD by YE13, although in the short-term pressure
on the currency will likely to linger given lack of catalyst in the
near term and increasing trend in US treasury yield. In
addition to improving macro data, we believe successful
government bond auction and gradual foreign inflow in
government bond may provide some comfort for the rupiah.



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Beyond Cabotage: Opportunities and Challenges of Shift from
Export FOB to CIF
Mamay Sukaesih (mamay.sukaesih@bankmandiri.co.id)


Transportation Services Account Deficit is dominated by
Freight

One of causing factors on current account deficit is services
account deficit. Share of services account deficit to current
account deficit is 35.4% in first half 2013. Services account
continue to deficit with an average deficit USD 2.6 bn per
quarter. Transportation service is main causing of services
account deficit which contributes 78.7% of services account
deficit in first half 2013. Freight greatly affect transportation
services account deficit especially imports of foreign
transportation services. Using of foreign freight very
monopolized in Indonesias export import. Hence, increasing
of export will make transportation services account deficit.
Transportation services for exports-import are large market
potential. By assumption average of freight cost USD 20 per
ton, potential market for sea transportation services for
Indonesias export is USD 12 bn per annum. (assumption
export volume is 600 mn ton per annum)





















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Transportation Services Account Export (RHS)
Figure 4. Transportation services account deficit is dominated by freight which contributed around
82%. Hence, increasing in export will make increasing in transportation services account deficit.
(Source: Bank Indonesia)



Transportation Services Account By Component Transportation Services Account and Export
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Implementation Cabotage and Its Implication

Since the implementation of cabotage in 2005 (through
Presidential Instruction 5/2005), total national fleet increased.
The number of Indonesian-flagged fleet was 12,047 units per
March 31, 2013, an increase of 99.2% from March 31, 2005 at
6,041 units. Most of the national merchant fleet type per
March 31, 2013 was for barges (33.07%), tug boats (31.04%)
and general cargo vessels (18.71%).

The number of sea transport companies (SIUPAL) and
specialized sea transport companies (SIOPSUS) also increased
rapidly. As of March 2013, shipping company permit (SIUPAL)
stood at 2,269 with a total fleet owned of 10,389 ships.
Meanwhile, specialized shipping company permit (SIOPSUS)
stood at 409 with a total fleet owned of 1,658 ships. SIUPALs
annual growth over the last 8 years (2004-2012) was 8.75%
CAGR. Meanwhile, SIOPSUS annual growth was 3.95% CAGR.
This shows that the implementation of cabotage for 8 years
had a positive impact on the national shipping industry
although the addition of the most national fleet still comes
from imports, mainly from Singapore and China.

However, national fleet only dominates domestic freight while
foreign freight is still controlled by foreigners. As of February
2013, national ships have carried 99.65% of the total domestic
freight at 359.67 mn tons. As for the foreign freight, the
national fleet only transported 10.1% of the total foreign
freight of 600.94 mn tons in February 2013. This condition
caused the loss of potential income, which reached USD 15 bn
per year.
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Opportunities from Export FOB to CIF Shift

To improve current account deficit and increase national fleet
in international freight, the Government plans to apply
beyond cabotage. Beyond cabotage is a national agenda in
order to increase the share of national shipping cargo for
foreign freight (export-import). One strategy of beyond
cabotage is to shift export quotation from export of the Free
On Board (FOB) to Cost Insurance and Freight (CIF). All this
Figure 5. The implementation of cabotage for 8 years had a positive impact on the national
shipping industry. (Source: Ministry of Transportation)




National Fleet development SIUPAL and SIOPSUS
Holders
Development of Sea Transport & Specialized Sea
Transport Companies (SIUPAL & SIOPSUS)

6,041
12,047
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
31 Maret 2005 31 Maret 2013
U
n
i
t

K
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p
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l
6,084
uni t
(99,2%)
1,453
1,591
1,704
1,831
1,982
2,140
2,273
2,504
2,664 2,678
0
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1,000
1,500
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2
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SIUPAL SIOPSUS TOTAL
65.20%
79.40%
90.20%
98.10% 98.80% 98.85% 99.65%
20.60%
9.80%
1.90% 1.20% 1.15% 0.35%
34.80%
2007 2008 2009 2010 2011 2012 Feb-13
Proportion of Those Transported by National Ships
Proportion of Those Transported by Foreign Ships
94.10% 92.88%
91.05% 90.98% 90.50% 90.14%
9.86% 9.50% 9.02% 8.95%
7.12% 5.90%
2007 2008 2009 2010 2011 2012
Proportion of Those Transported by National Ships
Proportion of Those Transported by Foreign Ships
Figure 6. National fleet only dominates domestic freight while foreign freight is still controlled by
foreigners. (Source: Ministry of Transportation)



Share of Domestic Sea Transport Freight Share of Foreign Sea Transport Freight
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time, the export transaction used the Free on Board (FOB),
under which exporter responsibility in the transport of
exported goods is until loading ports. Meanwhile, imports
using the Cost Insurance and Freight (CIF) take into account
the value of goods, shipping to delivery insurance costs. For
the first phase, the targeted commodities subject to the
adoption of CIF provisions in export transactions are CPO and
coal. The targeted share of foreign freight that can be
controlled by the national shipping is 15% in 2015 and 20% in
2020.

The trial of amendment in export provisions into Cost,
Insurance and Freight (CIF) began in August 2013. Previously,
the Government and some associations have agreed on the
transition of export provisions from FOB to CIF through a
memorandum of understanding on February 27, 2013. The
memorandum of understanding sets out that the
implementation of the amended export provisions from FOB
to CIF shall be no later than 6 months after the signing, or
exactly in August 2013.

Transition of export provisions from FOB to CIF may affect
selling prices of export commodities. The plan to require
Indonesian exporters to use the CIF provisions implies on
exporters to fulfill and bear all elements in freight costs,
means of transport of exported goods and insurance. Shipping
industry and national insurance must be able to offer
competitive rates. The rate issue is important because it will
affect the selling prices of Indonesian export commodities
abroad. In the case of high ship costs, insurance premiums and
interest rates on export loans, the price of Indonesian
exported products is less competitive compared to products of
other countries.
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Readiness of national fleet and ports is very important in the
CIF export policy so as not to weaken the competitiveness of
Indonesian exports. Based on data from UNCTAD and BIMCO
Review, Indonesia is ranked 9th in the cargo transport capacity
of maritime countries in Asia and has a capacity of only 0.61%
of world capacity. In addition, approximately 30% of the
national fleet is aged over 20 years. All this time, foreign ships
still dominate the foreign freight because foreign ships tend to
be more efficient due to the large size that the unit cost of
freight is lower. In addition, foreign ships have wide marketing
network that can provide more competitive rates compared to
national ships.

The implementation of beyond cabotage can provide
opportunities for banking and insurance. In addition to
increase foreign exchange, beyond cabotage is expected to
encourage investments in the shipping sector so that it
becomes an individual opportunity for the banking sector.
Also, it can be an opportunity for national insurance because
the CIF export provisions may drive demand on insurance
services nationwide.

Challenges from Export FOB to CIF Shift

There are some challenges of shift from export FOB to CIF.
First, National shipbuilding capacity remains limited so that
import is needed to meet the needs of national fleet to
2.8
4.5
4.9
6.4
18.8
19.7
25.5
31.5
39.5
93.5
Thai l and
Indonesi a
Fi l i pi na
Mal aysi a
Si ngapura
Tai wan
Korea
Hongkong
Chi na
Jepang > 25 years
21%
21-25 years
9%
16-20 years
13%
6-10 years
15%
0-5 years
27%
11-15 years
15%
Figure 7. the competitiveness of national shipping industry has relatively low. (Source: UNCTAD
and Ministry of Industry)



Cargo Transport Capacity of Maritime
Countries in Asia (Mn DWT)
Distribution of Fleet National Life
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export. In addition there will be a pressure to current account
from ship import in the short term. Nowadays, maximum
capacity of national shipbuilding at only 10.001-50.000 DWT
while fleet capacity to transport coal export is needed 55.000
70.000 DWT. For CPO commodities, fleet capacity needed to
transport CPO export is 30-000 50.000 DWT. Second, change
of export quality in case of potential delay in delivery. This will
hurt exporters and decrease competitiveness of national
export. Third, global network of national shipping company
has still low. So that national fleet has potential high backlog
level (empty cargo in a round trip boat). Backlog Fourth,
national exporters should have a good cash flow to do export
CIF. This is because by using export CIF, exporters would get
their payment after their commodities arrived on country
destination (around 30-40 working days). Fifth, the
competitiveness of port is still low. Dwelling time in national
port is relatively long. Dwelling time in Indonesia is 6+ days
while Singapore only 1.1 days, Malaysia 4 days, and Thailand 5
days.

Competitiveness of shipping service industry, national
insurance and national fleet capacity and port infrastructure
needs to be improved. Therefore, the CIF export provisions
will not have a negative impact on exports.










Figure 8. Dwelling time in national port is 6+ days, longer than dwelling time in Malaysia and
Thailand. (Source: Worldbank)



Dwelling Time in Some Countries
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Mandiri Leading Economic Index (MLEI)
Risks of an Economic Downturn Remains High
August 2013































The MLEI has decreased to 99.3 or -0.8% (MoM) in June 2013, from an increase of 0.5%
(MoM) in May 2013. MLEI fluctuated in the range of 99.2 to 100.2 during the period of
January 2013 to June 2013. Most of constituent indicators of MLEI such as Indonesia
stock market index, consumer confidence current condition index, export index, import
index, Rupiah to USD index, time deposit index and saving deposit index showed a
decrease in June 2013. It predicts the growth in the domestic economy will stable in
4Q13 from its 3Q13 level. We see a downside risk on our GDP growth forecast in 4Q13,
due to slower exports, coupled with weaker purchasing power due to rising inflation;
have slowed household consumption and investment. We had predicted the economic
growth to reach 5.8% in 2013.

From recent data, Indonesias economy in the 2Q13 expanded at the slowest pace in
almost three years, compounding concerns on the Southeast Asian nation as
investments ease, inflation accelerates and the currency slumps. Gross domestic
product rose 5.8% (YoY) in the 2Q13, lower than 6.03% (YoY) in 1Q13. Indonesias trade
balance for June 2013 was posted with USD 846.6 mn deficit, bringing the cumulative
deficit figure for the 1H13 to USD 3.31 bn. For June 2013, the largest deficit was
contributed by the oil and gas sector at USD 772.6 mn while non-oil-and-gas accounted
for USD 74 mn in the deficit. Despite the weakening of the Rupiah that has been
witnessed since the 2H12, Indonesias export growth has continued to be sluggish.

Recent improvement in US economic data has convinced many investors that The
Federal Reserve will in September 2013 begin reducing from USD 85 bn per month the
stimulus it injects into the economy. Indonesias Rupiah headed for its worst week since
2008 and government bonds dropped after the country posted a record current-account
deficit amid speculation the Federal Reserve will soon start tapering stimulus.

95.0
97.0
99.0
101.0
103.0
105.0
97.0
98.0
99.0
100.0
101.0
102.0
Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13*
MLEI (lhs) MCEI (rhs)
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2010 2011
Dec Dec Oct Nov Dec Jan Feb Mar Apr May Jun*
MLEI 100.3 100.2 99.8 100.2 99.2 99.8 100.2 99.3 99.6 100.1 99.3
Change (%MoM) (0.1) (0.1) (0.0) 0.4 (0.9) 0.5 0.5 (0.9) 0.3 0.5 (0.8)
MCEI 99.4 98.9 99.8 100.4 100.7 101.4 101.3 100.5 100.4 100.1 100.3
Change (%MoM) (0.1) (0.2) (0.7) 0.5 0.3 0.7 (0.1) (0.8) (0.1) (0.3) 0.2
2013 2012 2013


Jun-13*
(% MoM)
Mandiri Leading Economic Index (MLEI) 100.2 99.3 99.6 100.1 99.3 (0.8)
Indonesia Stock Market Index 101.4 100.2 101.9 100.3 98.2 (2.1)
Consumer Confidence Current Condition Index 100.0 99.6 100.3 101.0 100.2 (0.7)
Export Index 100.4 98.1 98.6 100.0 98.2 (1.7)
Import Index 100.4 97.7 99.4 99.8 98.1 (1.7)
Rupiah to USD Index 99.4 99.4 99.2 98.9 98.8 (0.1)
Private Deposit Index 99.4 99.2 97.0 100.1 100.3 0.2
Time Deposit Index 99.3 99.2 99.2 98.7 98.6 (0.1)
Saving Deposit Index 101.4 101.2 101.0 101.8 101.6 (0.2)
Jun-13* May-13 Apr-13 Feb-13 Mar-13


Jun-13*
(% MoM)
Mandiri Coincident Economic Index (MCEI) 101.3 100.5 100.4 100.1 100.3 0.2
Business Activity Expectation Index 102.6 100.0 100.4 101.1 101.7 0.6
Usage of Labor Expectation Index 103.6 103.1 101.9 100.6 99.6 (1.0)
Industrial Production Index 100.8 100.7 99.8 100.7 101.0 0.3
Retail Sales Index 100.3 99.5 100.7 99.5 99.5 0.1
Motorcycle Sales Index 100.7 100.7 100.6 99.9 100.7 0.8
Cement Consumption Index 99.7 99.1 99.1 98.8 99.2 0.4
Jun-13* May-13 Feb-13 Mar-13 Apr-13


note : *) preliminary
Index > 100 and increasing indicates expansion
Index > 100 but decreasing indicates downturn
Index < 100 and decreasing indicates slowdown
Index < 100 but increasing indicates recovery
Changes in parentheses indicate negative numbers












Mandiri Leading Economic Index (MLEI) and Mandiri Coincident Economic Index (MCEI) are composite indices
for predicting the movement of GDP (Gross Domestic Product) so they can be useful as an early warning on the
movement of Indonesian economy. MLEI is used to predict the movement of GDP in the next 6 months, while
MCEI is used to predict the movement of GDP in the same month. MLEI and MCEI composite indices are
formed from several indicators deemed important in studying the movement of Indonesian economy
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Mandiri Banking Pressure Index (MBPI)
Banking Sector: On Alert Mode
August 2013

Bank Mandiri as the biggest Bank considers the importance of being aware of the
banking sector development as a whole; both in booming times, recessions and crises
through a leading indicator. From the importance of being knowledgeable on the
financial (banking) sector development in the country in a clearer and measurable
manner, Bank Mandiri established the Mandiri Financial Performance Index (MFPI) which
is a reflection of the service sector and financial business performance, both historical
and real time. Bank Mandiri also composed an index that can project the direction of
MFPI future movement, called Mandiri Banking Pressure Index (MBPI).

Looking at the current actual condition, MFPI in August 2013 stays at 91.6. This
position indicates that the condition of the Indonesian banking sector is in an alert
situation. Amid a slowdown in bank credit growth, banking industry resilience remained
solid, which was reflected by a capital adequacy ratio (CAR) of 18%, well above the
minimum requirement of 8%, coupled with a low ratio of gross non-performing loans
(NPL) at just 1.9% in June 2013. Loan-to-Deposit Ratio (LDR) reported high of 87.2% in
June 2013 compared with May level of 86.3%. Credit growth slowed to 20.6% (YoY) in
June 2013 from 21.0% (YoY) in May 2013 due to the effect of weaker economic growth.
Bank Indonesia will continue to monitor rapid credit growth at a number of banks and
economic sectors, including those with high import contents that could undermine the
performance of the banking industry and unsettle financial system stability.

Mandiri Banking Pressure Index (MBPI) is a leading indicator of the banking sector in
Indonesia. It is an indicator that provides a predicted direction of MFPIs movement in
the next 6-9 months. In June 2013, it stayed at level 84.6 or down by 10% (MoM). We
expect in the period from December 2013 to March 2014, the Indonesian banking
condition will still maintain the prospective situation. This prediction is expected to be a
reference to taking appropriate pre-emptive measures and crisis mitigation efforts.

Bank Indonesia take further steps to maintain macroeconomic stability so as to
support sustainable economic growth. In the Board of Governors meeting, convened on
August 29, 2013, Bank Indonesia decided to increase the BI Rate by 50 bps to 7%. Bank
Indonesia will strengthen its policy mix by optimizing an array of monetary and macro
prudential policy instruments to curb inflation and to avoid further Rupiah depreciation,
as well as financial system stability overall. On August 23, 2013, Bank Indonesia also adds
five new policies to bolster the effectiveness of the prior policies. The synergized policy is
extremely strategic in the way that in addition to overcome short-term uncertainty, it
will also structurally arrest external imbalances, thereby leading to a more sound and
sustainable economy in the long term.


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Mandiri Banking Pressure Index (MBPI) and Mandiri Coincident Banking Pressure Index (MCBPI) are composite
indices for predicting Mandiri Financial Performance Index (MFPI) which is a reflection of the service sector and
financial business performance, so they can be useful as an early warning on the movement of Indonesian
banking sector. MBPI is used to predict the movement of banking condition in the next 6-9 months, while
MCBPI is used to predict the movement of banking condition in the same month. MBPI and MCBPI composite
indices are formed from several indicators deemed important in studying the movement of Indonesian
financial condition
40
80
120
160
200
Jan-08 Sep-08 May-09 Jan-10 Sep-10 May-11 Jan-12 Sep-12 May-13
Mandiri Financial Performance Index (MFPI)
MFPI Booming Signal High-Prospective Signal Prospective Signal Alert Signal High-Alert Signal Crisis Signal
Booming : MFPI > 139
High-Prospective : 120 < MFPI < 139
Prospective : 107 < MFPI < 120
Normal : 95 < MFPI < 107
Alert : 81 < MFPI < 95
High-Alert : 63 < MFPI < 81
note: * preliminary Crisis : MFPI < 63
Nov Dec Nov
2012 2013
Jul Aug* Dec
90.6 90.0
MFPI Threshold 2011
95.1
-1.6 0.0
97.0 91.6
-5.9 -5.6
95.1 MFPI
Period
Chg (%MoM) -0.4 -0.6
0
50
100
150
200
250
Jan-08 Sep-08 May-09 Jan-10 Sep-10 May-11 Jan-12 Sep-12 May-13
Mandiri Banking Pressure Index (MBPI)
MBPI Booming Signal High-Prospective Signal Prospective Signal Alert Signal High-Alert Signal Crisis Signal
Booming : MBPI > 144
High-Prospective : 114 < MBPI < 144
Prospective : 91 < MBPI < 114
Normal : 72 < MBPI < 91
Alert : 49 < MBPI < 72
High-Alert : 19 < MBPI < 49
note: * preliminary Crisis : MBPI < 19
2012
Nov
2013
100.0 63.1
Dec
84.6
Period
MBPI 89.3
Dec Nov
MBPI Threshold
May Jun*
2011
74.7 94.0
18.3 -10.4 -10.0 Chg (%MoM) -11.0 11.9 4.7
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MACRO ECONOMIC INDICATORS AND FORECAST 2007 2008 2009 2010 2011 2012 2013F 2014F
National Account
Real GDP (% yoy) 6.3 6.0 4.6 6.2 6.5 6.2 5.8 5.9
Domestic Demand (% yoy) 6.0 7.5 5.4 5.3 5.7 6.2 4.7 5.0
Real Consumption: Private (% yoy) 5.0 5.3 4.9 4.7 4.7 5.3 4.8 5.0
Real Consumption: Government (% yoy) 3.9 10.4 15.7 0.3 3.2 1.3 3.7 5.2
Real Gross Fixed Capital Formation (% yoy) 9.3 11.9 3.3 8.5 8.8 9.8 4.7 5.0
Real Exports (% yoy) 8.5 9.5 (9.7) 15.3 13.6 2.0 3.6 3.6
Real Imports (% yoy) 9.1 10.0 (15.0) 17.3 13.3 6.6 (0.3) 3.0
GDP (IDR tn) - nominal 3,951 4,949 5,606 6,447 7,423 8,242 9,855 10,763
GDP (USD bn) - nominal 432 511 539 709 846 879 977 1,022
GDP per capita (USD) - nominal 1,916 2,234 2,328 2,985 3,569 3,662 4,023 4,160
External Sector
Exports (%yoy,USD) - Merchandise 14.0 18.3 (14.3) 32.1 27.0 (6.1) (3.7) 3.4
Imports (%yoy,USD) - Merchandise 15.4 36.9 (24.0) 43.7 30.3 8.4 (0.6) 3.6
Trade Balance (USD bn) 32.8 22.9 30.9 30.6 34.8 8.6 2.6 2.4
Current Account (% of GDP) 2.4 0.0 2.0 0.7 0.2 (2.7) (3.1) (2.7)
Current Account (USD bn) 10.5 0.1 10.6 5.1 1.7 (24.1) (29.9) (27.8)
External Debt (% of GDP) 32.7 30.4 32.1 28.5 26.6 27.8 27.9 29.3
International Reserves (USD bn) 56.9 50.0 66.1 96.2 110 110 90 93
Import cover (months) 8.0 5.1 8.9 9.1 8.0 7.4 6.0 6.0
IDR/USD (period average) 9,139 9,692 10,408 9,087 8,776 9,384 10,089 10,530
IDR/USD (year end) 9,235 11,028 9,470 8,963 9,000 9,670 10,500 10,400
Other
BI rate (% period average) 8.4 8.8 6.9 6.5 6.6 5.8 6.7 7.3
BI rate (% year end) 8.0 9.3 6.5 6.5 6.0 5.8 7.5 7.0
Headline Inflation (% yoy, period average) 6.4 10.3 4.3 5.3 5.1 4.3 7.5 6.3
Headline Inflation (% yoy, year end) 6.4 11.1 2.8 7.0 3.8 4.3 9.0 5.0
Fiscal Balance (% of GDP) (1.3) (0.1) (1.6) (0.6) (1.5) (1.6) (1.8) (1.7)
S&P's Rating - FCY BB- BB- BB- BB BB+ BB+ BB+ BB+
S&P's Rating - LCY BB+ BB+ BB+ BB+ BBB- BBB- BBB- BBB-
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Disclaimer: This material is for information only, and we are not soliciting any action based upon it. This report is not to be
construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or
solicitation would be illegal. The information herein has been obtained from sources believed to be reliable, but we do not
warrant that it is accurate or complete, and it should not be relied upon as such. Opinion expressed is our current opinion as of
the date appearing on this material only, and subject to change without notice. It is intended for the use by recipient only and
may not be reproduced or copied/photocopied or duplicated or made available in any form, by any means, or redistributed to
others without written permission of PT Bank Mandiri Tbk. Additional information is available upon request. For further
information please contact: Office of Chief Economist, Ph. (021) 524 5516/5272 or Facs. (021) 521 0430.
INDONESIA CURRENT DATA
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Exchange Rate
End of Period IDR/USD 9,393.00 10,900.00 9,390.00 8,978.00 9,069.00 8,990.00 9,023.00 9,146.00 9,189.00 9,400.00 9,433.00 9,467.00 9,581.00 9,589.00 9,608.00 9,594.00 9,658.00 9,740.00 9,664.00 9,715.00 9,734.00 9,877.00
Average IDR/USD 9,354.10 1,167.09 9,461.91 9,021.26 9,059.00 9,071.00 9,020.00 9,251.00 9,175.00 9,320.00 9,442.00 9,451.00 9,505.00 9,565.00 9,599.00 9,620.00 9,634.00 9,656.00 9,681.00 9,708.00 9,724.00 9,765.00
Monetary Sector
Base money M0, eop IDRtn 379.58 344.69 402.12 518.45 613.49 594.08 578.96 586.03 596.59 604.98 627.36 634.99 657.96 638.87 648.11 647.98 704.84 664.01 655.49 664.93 667.12 681.51
Narrow money M1 IDRtn 450.06 456.79 515.82 605.38 733.99 696.32 683.25 714.25 720.92 749.45 779.41 771.79 772.42 795.51 774.98 801.40 841.70 787.92 786.61 810.11 832.27 822.93
Broad Money M2 IDRtn 1,649.66 1,883.85 2,141.38 2,469.40 2,877.22 2,854.98 2,849.80 2,911.92 2,927.26 2,992.06 3,050.36 3,054.84 3,089.01 3,125.53 3,161.73 3,205.13 3,304.65 3,265.87 3,277.43 3,319.47 3,357.82 3,423.15
Outstanding Loan IDRtn 995.11 1,313.87 1,446.81 1,783.60 2,223.69 2,207.51 2,227.79 2,291.54 2,343.43 2,411.73 2,480.03 2,498.74 2,539.28 2,584.28 2,615.08 2,661.02 2,738.05 2,718.12 2,748.93 2,801.04 2,856.62 2,921.00
Outstanding Deposit IDRtn 1,459.44 1,673.82 1,914.11 2,208.72 2,596.33 2,540.24 2,567.36 2,624.51 2,636.04 2,697.10 2 ,735.35 2,738.93 2,761.23 2,799.06 2,834.54 2,877.10 2,942.55 2,941.64 2,958.62 2,991.28 3,036.50 3,091.96
Lending rate (working capital) % p.a 13.00 15.22 13.69 12.83 12.16 12.09 12.02 12.01 11.86 11.78 11.79 11.78 11.73 11.70 11.68 11.61 11.49 11.49 11.45 11.44 11.44 11.46
3-month deposit rate, eop % p.a 7.42 11.97 6.85 7.06 6.81 6.68 6.52 6.31 6.00 5.89 5.76 5.67 5.61 5.69 5.66 5.81 5.76 5.89 5.92 5.64 5.73 5.68
Overnight rate, eop % p.a 4.50 9.40 6.24 5.72 4.55 4.02 3.75 3.76 3.76 3.93 4.05 4.06 4.09 4.10 4.18 4.15 4.19 4.18 4.20 4.25 4.16 4.17
Prices
Headline CPI (2007=100) Index 155.50 113.86 117.03 125.17 129.91 130.90 130.96 131.05 131.32 131.41 132.23 133.16 134.43 134.45 134.67 134.76 135.49 136.88 137.91 138.78 138.64 138.60
Year on year inflation rate % 6.59 11.06 2.78 6.96 3.79 3.65 3.56 3.97 4.50 4.45 4.53 4.56 4.58 4.31 4.61 4.32 4.30 4.57 5.31 5.90 5.57 5.47
Month on month inflation rate % 1.10 (0.04) 0.33 0.92 0.57 0.76 0.05 0.07 0.21 0.07 0.62 0.70 0.95 0.01 0.16 0.07 0.54 1.03 0.75 0.63 (0.10) (0.03)
Year to date inflation rate % N/A 11.06 2.78 6.96 3.79 0.76 0.81 0.88 1.09 1.15 1.79 2.50 3.48 3.49 3.66 3.73 4.30 1.03 1.79 2.43 2.32 2.30
Wholesale Price Index (2000=100) Index 217.00 238.00 167.35 177.87 185.76 187.11 187.77 188.54 189.45 189.72 190.22 190.76 191.81 192.11 192.19 192.00 192.06 194.34 195.60 196.04 196.03 196.38
Trade
Export USDbn 10.86 8.69 13.35 16.83 17.20 15.49 15.69 17.25 16.17 16.82 15.44 16.10 14.05 15.89 15.32 16.31 15.40 15.38 15.02 15.02 14.76 16.13
Oil USDbn 2.51 1.24 2.50 3.26 3.60 2.97 3.35 3.48 3.56 3.72 2.89 2.91 2.78 2.77 2.65 27.17 2.97 2.65 2.57 2.93 2.45 2.93
Non oil USDbn 8.36 7.45 10.85 13.57 13.60 12.51 12.33 13.76 12.61 13.11 12.55 13.17 11.26 13.12 12.67 13.59 12.43 12.72 12.45 12.10 12.31 13.21
Import USDbn 6.81 6.29 10.33 13.15 16.34 14.55 14.86 16.32 16.93 17.03 16.72 16.35 13.81 15.34 17.21 16.94 15.58 15.45 15.31 14.89 16.46 16.66
Oil USDbn 2.39 0.98 2.10 2.64 3.63 2.98 3.49 4.00 4.12 3.44 3.35 2.76 3.31 3.44 3.83 4.08 3.71 3.97 3.64 3.90 3.63 3.44
Non oil USDbn 4.42 5.31 8.22 10.50 12.71 11.53 11.37 12.31 12.81 13.60 13.37 13.60 10.55 11.90 13.38 12.86 11.88 11.48 11.67 10.98 12.83 13.23
Trade Balance USDbn 4.06 2.40 3.02 3.68 0.86 0.94 0.83 0.93 (0.76) (0.21) (1.28) (0.25) 0.24 0.55 (1.89) (0.63) (0.18) (0.07) (0.30) 0.14 (1.70) (0.53)
Output
GDP (current price) IDRtn 1,034.86 1,274.29 1,450.82 1,670.52 1,921.56 1,972.35 2,050.09 212.28 209.56 214.49
GDP (constant price at 2000) IDRtn 493.37 518.94 547.54 585.10 623.96 632.77 650.58 671.78 662.00 671.40
Real Growth % YoY 5.88 5.20 5.43 6.89 6.49 6.32 6.37 6.17 6.11 6.03
Capital Market
JCI Index, eop Index 2,745.83 1,355.41 2,534.36 3,703.51 3,821.99 3,941.69 3,985.21 4,121.55 4,180.73 3,832.82 3,955.57 4,142.33 4,060.33 4,262.56 4,350.29 4,276.14 4,316.68 4,453.70 4,795.79 4,940.99 5,034.07 5,068.63
Volume, avg shares mn 3,155.65 1,743.25 3,422.10 3,965.38 3,496.38 4,045.49 3,482.60 2,751.16 4,407.93 3,092.99 2,936.69 2,529.66 2,624.87 3,796.55 3,916.49 3,794.15 3,861.68 3,953.34 6,323.75 6,326.74 4,756.76 5,076.09
Value, avg IDRbn 4,340.55 1,454.61 2,332.42 3,959.30 2,684.29 3,269.50 4,161.39 3,773.30 4,103.34 3,967.34 3,216.60 3,347.23 3,068.91 3,518.67 3,623.31 3,633.00 4,078.36 4,160.63 4,949.78 6,122.93 5,124.44 6,210.03
Consumer Confidence Index 99.10 90.60 108.70 109.30 116.60 119.20 111.70 107.30 102.50 109.00 114.40 113.50 115.70 117.70 119.50 120.10 116.40 116.20 116.80 116.80 113.70 111.70
2013 2012
Indicators Unit 2011 2010 2007 2008 2009
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Ofce of Chief Economist

Office of Chief Economist Page 28 of 42






O Ov ve er rs se ea as s O Of ff fi ic ce es s
Hongkong Branch
7
th
Floor, Far East Finance Centre
16 Harcourt Road, Hongkong
Tel: 852-2527-6611
Fax: 852-2529-8131

Singapore Branch
3 Anson Road #12-01/02, Springleaf Tower
Singapore 079909
Tel: 65-6213-5688
Fax: 65-6438-3363

Cayman Islands Branch
Cardinal Plaza 3
rd
Floor
30 Cardinal Avenue, PO Box 10198,
Grand Cayman, KY1-1002, Cayman Islands
Tel: 1-345-945-8891
Fax: 1-345-945-8892

Bank Mandiri (Europe) Limited, London
Cardinal Court (2
nd
Floor),
23 Thomas More Street
London EIW IYY, United Kingdom
Tel: 44-207-553-8688
Fax: 44-207-553-8699

Shanghai Representative Office
3401, Bank of China Tower
200 Yin Cheng (M) Road,
Pudong New Area, Shanghai, 200120
Peoples Republic of China
Tel: 86-21-5037-2509
Fax: 86-21-5037-2507

Dilli Branch Timor Leste
Avenida Presidente Nicolao Lobato
No.12, Colmera
Dilli Timor Leste
Tel: +670-331-7777
Fax: +670-331-7190/74444

Mandiri International Remittance Sdn.Bhd.
Wisma Mepro, 29 & 31 Jalan Ipoh 51200 Kuala
Lumpur, Malaysia
Telp : +60-3-4045-988

Shanghai Branch
1201-1204 Bank Of Shanghai Tower
168 Yin Cheng Zhong Road , Pudong, Shanghai
200120
Peoples Republic Of China
Phone : (86-21) 20332603
Fax : (86-21) 20282817


H He ea ad d O Of ff fi ic ce e

Plaza Mandiri
Jl. Jend. Gatot Subroto Kav. 36-38
Jakarta 12190, Indonesia
Tel: (62-21) 526 5045 526 5095
Fax: (62-21) 526 8372 526 5008
Website: www.bankmandiri.co.id


Budi G. Sadikin
President Director & CEO
Tel: (62-21) 3002 3067, Fax: (62-21) 526 3459
Riswinandi
Deputy President Director
Tel: (62-21) 3002 3028, Fax: (62-21) 526 3408
Abdul Rachman
Director Institutional Banking
Tel: (62-21) 3002 3839, Fax: (62-21) 526 3671
Sentot A. Sentausa
Director Risk Management
Tel: (62-21) 3002 3454, Fax: (62-21) 526 8213
Ogi Prastomiyono
Director Compliance & Human Capital
Tel: (62-21) 3002 3666, Fax: (62-21) 252 1585
Pahala N. Mansury
Director Finance & Strategy
Tel: (62-21) 3002 3089, Fax: (62-21) 526 8213
Fransisca N. Mok
Director Corporate Banking
Tel: (62-21) 3002 3847, Fax: (62-21) 252 1585
Sunarso
Director Commercial & Business Banking
Tel: (62-21) 3002 3087, Fax: (62-21) 252 1585
Kresno Sediarsi
Director Technology & Operation
Tel: (62-21) 524 3092, Fax: (62-21) 526 3617
Royke Tumilaar
Director Treasury, FI & Special Asset Management
Tel: (62-21) 3002 3057, Fax: (62-21) 5296 4053
Heri Gunardi
Director Micro & Retail Banking
Tel: (62-21) 3002 3079, Fax: (62-21) 252 1585
Riyani T. Bondan
EVP Coordinator Internal Audit
Tel: (62-21) 3002 3722, Fax: (62-21) 5296 4116
Ventje Raharjo
EVP Coordinator Change Management Office
Tel: (62-21) 3002 3076, Fax: (62-21) 526 8213
Tardi
EVP Coordinator Consumer Finance
Tel: (62-21) 3002 3075, Fax: (62-21) 5296 4116