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November 20, 2015

Economy Outlook 2016

Dini Agmivia Anggraeni

Inflection Point

(dini.anggraeni@trimegah.com)

Stimulus to kick in
Couple of stimulus has been launched by government during September
November this year, attracting new investment, specifically FDI, and to
improve domestic demand. More importantly, current government direction is clearer on stimulus mode rather than mixed signal in first semester. We also anticipate another big three stimulus program including : 1)
tax amnesty, 2) corporate tax rate cut, and 3) foreign ownership in property. Expect around Rp 400tn flow to the system and consumption demand to improve in 6-12 months lag time.
Moderate inflation gave room for interest rate loosening
On persistently low oil price, we expect inflation to ground at moderate
level, i.e. 5% in 2016. The downside is if oil price jump to USD 70/barrel
~ consistent in 3 months ~ and weakening rupiah is faster than expected.
With those moderate inflation level, BI has room to lower interest rate but
we think the central bank should wait for clearer signal from US regarding
its interest rate movement.

MACRO ECONOMY DATA


GDP 3Q15

4.73%

Bank Indonesia rate

7.50%

Inflation Oct 15 (YoY)

6.25%

Inflation Oct 15 (MoM)


Trade balance Oct 15

-0.08%
USD 1,019mn

Current account 3Q15

-1.86% of GDP

USD/IDR*

13,775

10Y Government Bonds*


FX Reserves Oct 15

8.66%
USD 100.7bn

* As of 19 Nov 2015

Rupiah should return to its normal depreciation rate vs USD


Bigger infrastructure spending and pick up on consumption might widen
Indonesia CAD to 2.27%% of GDP in 2016 vs 1.90% of GDP in 2015 (est)
which lead to currency weakening. Stronger USD post the anticipated US
interest rate hike also will add another pressure to rupiah. We expect
rupiah to hover at 14,100/USD by end of 2016 and 13,988/USD average
level.
GDP to recover, but slowly
On top of government stimulus to add more money flow into the system;
huge infrastructure budget; and improving domestic demand, we expect
GDP momentum to increase from 4.8% (est) in 2015 to 5.0% in 2016.
The recovery will take in smooth pace as challenge from China deteriorating economy is still on the table. Meanwhile, services sector still resilient
and fuel growth to our economy. Those sector contribute almost 50% to
the Indonesia GDP growth, especially IT & Telecommunication business,
financials, and transportation.

Macroeconomy Forecast

2015

2016F

2017F

Inflation

4.50%

5.00%

5.50%

GDP growth

4.80%

5.00%

5.20%

Rupiah / USD (avg)

13,397

13,988

14,213

Rupiah / USD (eop)

13,900

14,100

14,300

BI rate

7.50%

7.50%

7.50%

Bond yield (10-year bond)

8.40%

8.20%

8.20%

Source: CEIC, TRIM Research


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ECONOMIC FOCUS

Year of stimulus..
Six stimulus package has been launched by government during September-November this year. Main purpose is
to attract new investment, specifically FDI, and to improve domestic demand. In order to attract investment,
Government mostly used tax incentives including tax allowances & tax holiday as well as shorter time required
for business permits. Meanwhile, higher PTKP; lower fuel & electricity tariff; wage increase standard; and wider
KUR facility were supposed to be the efforts to stimulate domestic demand.
More importantly, current government direction is clearer on stimulus mode rather than mixed signal in first semester. We also anticipate another big three stimulus program including : 1) tax amnesty, 2) corporate tax rate
cut, and 3) foreign ownership in property, to be executed by the end of this year or early next year.

Tax Amnesty RUU Draft

Type

Elemination of tax administrative and criminal sanction

Assets

Market value of tangible or non-tangible goods, movable or non-movable

Subject

Individual or corporate

Settlement Rate

3% : reporting in 2015
5% : reporting between Jan 2016 - June 2016
8% : reporting between July 2016 - Dec 2016

Constraint
Facility

Tax subject has to give attorney to Tax dept for account access
a. Elimination of taxes payable, tax administration penalties and criminal sanctions in the
field of taxation for the tax obligations before this law is enacted which has not issued tax
assessments.
b. Not exposed to the letter forced tax collection, tax audit, preliminary evidence examination, investigation and prosecution of criminal offenses in the field of taxation on tax obligations in tax period, part of the tax year and the tax year before the legislation is enacted.
c. In the case of Individual or Agency being conducted tax audit or preliminary evidence examination for the tax obligations before this law is enacted, the top tax audit or examination
of the preliminary evidence is stopped.

Source: TRIM Research

Tax amnesty, as the game changer


Tax amnesty as one of the biggest stimulus waited by investors is targeting around Rp 3,000tn (~ 27% of countrys nominal GDP) subjected assets to be repatriated. But, we dont think it could fully repatriated as some of
the reasons that citizens place their money in offshore were for business activities, larger investment choices,
and the tax advantage they could get. Looking the successful tax amnesty case in Italy, the government could
repatriate 16% (80bn) from the total subjected assets (500bn ~ 35.7% of countrys nominal GDP) at 5% flat
tax rate. This is pretty similar with Indonesias case which offer 3% - 8% settlement tax rate. Thus, assum-

ing Indonesia government could have 13% success rate, it will translate to Rp 400tn assets declared
come to the system and result in Rp 20tn additional tax revenue

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ECONOMIC FOCUS

Tax amnesty in Italy (2009)

The scheme

Italy introduced tax amnesty in 2001, which was


extended in 2003
In 2009, the Italian tax amnesty subjected repatriated
assets to a flat tax of 5%
The Bank of Italy estimated that Italian citizens held
around 500bn in undeclared funds outside the country
In total around 80 billion in assets were declared,
which resulted in tax revenues of 4 Billion
The assets need to be repatriated
Source: TRIM Research, Various Source

Source: TRIM Research, Various Source

Stimulus package Part IVI


Stimulus

Announced Highlight of stimulus packages

Stimulus 1

9-Sep-15

Stimulus 2

29-Sep-15

Stimulus 3

7-Oct-15

Stimulus 4

16-Oct-15

Govt will revise 154 regulations by end of October to improve investment climate
Administered gas price for several industry (no details provided)
Price control i.e. rice, to help purchasing power for low-income group
Reducing KUR (microfinance credit) interest rate from 23% to 12%
Tax allowances to encourage investment and discourage repatriation
Tax holiday facility expanded from 10 to 20 years with wider industry coverage
Tax incentive for export proceeds deposit
Tax removal for shpyard business, railway, and airplane spareparts
Integrated logistic zone
Industry gas price discount by up to 25% (could be for selective industries) effective
Jan 2016
Avtur price cut by 5% for offshore usage and 1% for local usage (benefits airlines)
Diesel price cut by 3%, effective in three days
Pertalite price cut by 1%, effective in three days
LPG (12kg) price cut by 5%
Electricity tariff discount by 30% for late night usage (11pm - 8am)
Electricity payable facility, allowing corporates to pay 40% of its bill in installments
Shortening time required for corporates to process land leases from 50-90 days to 7-30
Days

Standardized formula for minimum wage increase p.a (inflation + gdp growth)
Wider debitur criteria for KUR

LPEI (Lembaga Pembiayaan Ekspor-Impor) will have different regulation from


Bank
Stimulus 5

23-Oct-15

Stimulus 6

5-Nov-15

Income tax discount for Company which revaluate their assets (3% vs 10% currently
charged)

Reducing double taxation for REIT (Real Estate Investment Trust)


Allowing foreigners to own KEK property, include home site

Income tax discount from 20% to 100% during 5-25 years for new KEK investment
No need to pay VAT for import and transactions between KEK player is not exposed for
VAT

Source: Various Sources, TRIM Research

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ECONOMIC FOCUS

Corporate income tax cut


Another potential big stimulus is from corporate tax rate cut from 25% to 18%. But, to get parliament approval
for income tax adjustment on the budget, government has to pass the tax amnesty bill to compensate the lower income tax revenue.
Indonesia have applied this before in 2008 (effective per January 2009), with tax rate lowered from 30% to
28% and further to 25%. Cut in corporate income tax also will be followed by personal income tax cut which
also happened in the previous case. However, the government could still maintain the tax revenue target in the
corresponding year, meeting 102% income tax target and increase by 6.8% YoY.
Corporate income tax comprise around 54% from total income tax and targeted at Rp 408tn in 2016. Thus,
with lower tax rate will potentially cut government income tax revenue by Rp 64tn. But, the multiplier to economy could be bigger

Income tax composition

Corporate vs Personal income tax


2015 APBN P

Source: TRIM Research, MoF

2016 RAPBN

Source: TRIM Research, MoF

Allowing foreigners to own property in Indonesia


Meanwhile, to encourage property sector, Government will allow foreigners to own Indonesia property with
strata title licence. One that has launched is foreign ownership in Special Economic Zone (SEZ/KEK). Some limitations might apply such as minimum price and minimum floor. From what we heard, the property should be
above Rp 5bn and minimum at the 3rd floor ~ means not landed house.
According to BI data, apartment sales around Jabotabek has experienced slowest growth in Q1-2014 (4% YoY)
yet improving in Q2-2015 (12% YoY). However, the prices are down by 10% YoY as per June 2015 with average price around Jabotabek stand at Rp 21.3mn/sqm.

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ECONOMIC FOCUS

Apartment sales data in Jabotabek

Source: TRIM Research, BI

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Apartment selling price in Jabotabek

Source: TRIM Research, BI

ECONOMIC FOCUS

Budget 2016 : More realistic number

The parliament has passed 2016 state budget on Oct 30. They are agreed for 5% increase in revenue
to Rp 1,848tn while spending is targeting to rise by 7% to Rp 2,121tn. Yet, lawmakers engaged in
debate over state capital injection (PMN) that resulted in a temporary moratorium on the disbursement. The Golkar, PKS, and Gerindra fractions claimed that the capital injections were not worthy
and that the funds would have better used for other purposes, such as village fund. PMN for state
owned company worth Rp 39.4tn in RAPBN 2016 frozen until revised state budget passed. About
48% of it is allocated for infrastructure company, such as PT Sarana Multi Infrastruktur (Rp 5tn),
WIKA (Rp 3tn), PTPP (Rp 2tn), Hutama Karya (Rp 3tn), Jasa Marga (Rp 1.25tn), and etc.

APBN 2016
2015
Details

APBN-P

A. Revenue

1,761.6

Domestic Revenue

2016
APBN

Changes APBN '16


vs APBN-P '15
(Rp bn)

(%)

1,822.5

60.9

3.5%
3.5%

1,758.4

1,820.5

62.1

1,489.3

1,546.7

57.4

3.9%

PPh

679.4

757.2

77.8

11.5%

PPN

576.5

571.7

(4.8)

-0.8%

PBB

26.7

19.4

(7.3)

-27.3%

Tax Revenue

Cukai

145.7

146.4

0.7

0.5%

Import Duty

37.2

37.2

(0.0)

0.0%

Export Duty

12.1

2.9

(9.2)

-75.9%

Other

11.7

11.9

0.2

269.1

273.8

4.7

1.7%

Oil & Gas

81.4

78.6

(2.8)

-3.4%

Non Oil & Gas

37.6

46.3

8.7

23.3%

SOE Dividend

37.0

34.2

(2.8)

-7.5%

Other Non Tax Rev

90.1

79.4

(10.7)

-11.9%

BLU

37.0

35.4

(1.6)

-4.2%

3.1

2.0

(1.1)

-35.5%

1,984.1

2,095.7

1,319.5
772.3

Non-Tax Revenue

Grant
B. Expenditure

1.5%

111.6

5.6%

1,325.6

6.1

0.5%

784.1

11.8

1.5%

276.0

302.3

26.3

9.5%

551.9

541.4

(10.5)

-1.9%

i.e. Energy Subsidy

137.8

102.1

(35.7)

-25.9%

Fuel, Gas, BBN

64.7

63.7

(1.0)

-1.5%

Electricity

73.1

38.4

(34.7)

-47.5%

74.3

80.5

Central Government
Ministry
i.e. Capital Spending
Non Ministry

i.e. Non-Energy Subsidy


Additinal Govt Spending
Transfer to Region
Village Fund
C. Primary Balance
D. Fiscal Surplus (Deficit)
% Deficit to GDP

20.9

6.2

8.4%

(20.9)

-100.0%

641.6

723.2

81.6

12.7%

20.0

47.0

27.0

135.0%

(68.4)

(88.2)

(19.8)

29.0%

(224.1)

(273.2)

(49.1)

21.9%

(1.9)

(2.1)

Source: MoF, TRIM Research

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ECONOMIC FOCUS

Tax revenue only increase 3.9% YoY, align with stimulus mode
With Rp 1,822tn target for the revenue, government is aiming from tax and duty worth Rp 1,547tn (+3.9% YoY)
and non tax revenue worth Rp 274tn (+1.7% YoY). We think the number is more realistic noting that current
government focus is to give stimulus. Excise tax (cukai) target is only targeting to increase by 0.5% to Rp
146.4tn, means no significant change in excise tax rate next year. Latest cigarette tax increase was in November
from 8.7% (average) to 11.2% (average) to be effective per 1 Jan 16. Meanwhile, dividend target of SOE companies is lower by 7.5% to Rp 34.2tn.

Tax Ratio

Source: TRIM Research, MoF

Tax component

Source: TRIM Research, MoF

Capital spending allocate around Rp 300tn (+10% YoY)


For spending, targeted to be Rp 2,095.7tn include around Rp 300tn allocated for capital spending. Biggest increase allocation is for village fund, by 135% YoY to Rp 47tn. Meanwhile, transfer to region is budgeted to increase by 12.7% to Rp 723.2tn. For subsidy, energy subsidy is declined by 25.9% to Rp 102.1tn, driven by lower electricity subsidy (from Rp 73.1tn to Rp 38.4tn).

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ECONOMIC FOCUS

Fuel subsidy reform gave fiscal room

Source: TRIM Research, MoF

Capital spending realization YTD 2015

Source: TRIM Research, MoF

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Subsidy Vs Capital Spending (%)

Source: TRIM Research, MoF

Ministry budget outlook

Source: TRIM Research, MoF

ECONOMIC FOCUS

Deficit financing strategy : higher global bond issuance


Thus, total deficit is account for Rp 273.2tn or 2.1% of GDP with addition of state capital injection plan worth Rp
48.4tn (yet still on freeze). To finance the deficit, government need to issue Rp 327.2tnnet government bond
or Rp 509.3tn-gross issuance. Portion of global bond issuance is targeted to increase from 25% to 30% of total
issuance, to lower supply pressure in domestic market. Government also estimated to have Rp 50tn excess cash
(SAL/Saldo Anggaran Lebih) from 2015 budget which could be used for 2016 financing.

Deficit Financing Plan (Rp tn)


2015
APBN-P

Details

I. Government Bonds (net)


II. Offshore Financing (net)
1. Withdrawal
a. Program Loan
b. Project Loan
2. Loan extension to BUMN/Pemda
3. Loan repayment
III. Onshore Financing (net)
1. Withdrawal
2. Loan repayment
Total Loan Financing (net)

2016
APBN

297.70
(20.01)
48.65
7.50
41.15
(4.47)
(64.18)
1.69
2.00
(0.31)
279.38

326.27
1.20
72.84
34.58
38.26
(5.91)
(65.73)
3.26
3.71
(0.45)
330.73

Source: MoF, TRIM Research

Government Bond Issuance Target (Rp tn)

Net Issuances
Domestic bonds
Global bonds
Redemption & buybacks
Gross Issuances
Total Domestic bonds
Conventional FR/VR
T-bills/ZC bonds
Retail bonds (ORI & Sukuk)
Domestic sukuk
Private placement
10-yr Bond Yield (RHS)
Global bonds
Yankee bonds
Euro MTN
Global sukuks
Samurai Bonds
USD SUN

2013
236.5
263.7
58.4
(85.5)
328.0
263.7
165.5
53.8
35.2
9.3
-

2014
277.0
342.2
86.0
(152)
428.1
342.2
186.9
60.9
42.9
38.5
13.0

6.9
58.4
39.1

8.2
86.0
48.5
15.8
17.7
0.0
4.0

17.0
2.3

2015 F
299.3
362.3
90.6
(154)
452.9
362.3

90.6

2015 YTD
358.5
331.0
113.6
(86.0)
451
331.0
180.3
52.9
49.0
42.8
6.0
7.9
113.6
51.2
18.5
26.3
10.9
6.7

2016F
326.3
356.5
152.8
(183.0)
509.3
356.5

152.8

Source: MoF, TRIM Research

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ECONOMIC FOCUS

GDP momentum to improve in 2016


Indonesia economy grew by 4.73% in 3Q 2015, a slight uplift from 4.67% in the previous quarter. On top of
government stimulus to add more money flow into the system; big infrastructure budget; and improving domestic demand, we expect GDP momentum to increase further to 5.0% in 2016 (vs 4.80% 2016 est). The recovery will take in smooth pace as challenge from China deteriorating economy is still on the table. Lower commodity prices is expected to linger in 2016, add pressures to Indonesia trade especially CPO, coal, and rubber.

World economy growth

Source: TRIM Research, World Bank

World trade volume growth

Source: TRIM Research, World Bank

Expect stimulus to help domestic demand


Retail and consumers company still struggling in 2015. Retail companies under our sample bucket only booked
5% SSSG growth in 3Q15. Gaikindo data showed that Indonesia car sales also declined by 18% YoY 9M15 as
well as motorcycle sales which dropped by 20%. But, 3Q momemtum is better than 2Q, especially motorcycle
which grew by 5% QoQ VS 1.6% QoQ of car sales. Consumers company also booked better sales in 3Q due to
lebaran effect, grew by 7% YoY vs 4% YoY in 2Q15. We also believe couple of stimulus launched by government will improve private demand in the forthcoming quarter, despite need lag time around 6-12 months.

Standardized wage increase for labour


One of the economy stimulus packaged launched in October is also talk about employment. The government
set formula for provincial minimum wage increase per year to be : inflation + gdp growth. The base year will be
2015. We think it will benefit both for the employee and business player as they can certainly calculate the cost
increase for doing business in Indonesia.

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10

Indonesia GDP growth contributor

Source: BPS, TRIM Research

Auto, cement sales, CCI (3 mo Moving Average)

Source: Bloomberg, TRIM Research

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11

Retail SSSG

Source: TRIM Research, Companies

Consumers companies sales

Source: TRIM Research, Companies

Meanwhile, investment was well on track


Investment and government spending were the two factors behind improving GDP momentum in 3Q15. Factors
that we can control, we control it well. According to BKPM data, investment realization has reached Rp 400tn
during 9M15 or gathered 77% of government target. It increase by 17% YoY in 3Q using IDR term while adjusting to USD term result in 11.2% YoY growth ~ faster than 2Q achievement of 10.5% YoY. With tax incentive facility as well as tax amnesty which potentially attract Rp 400tn flow into system, we believe investment
(GFCF) component will be the main driver for higher GDP in 2016 which we expect to improve from 4.8% (est)
in 2015 to 5.0% in 2016.

3Q investment growth faster than 2Q

Source: TRIM Research, BKPM

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Sector wise

Source: TRIM Research, BKPM

ECONOMIC FOCUS

12

Total heavy equipment sales

Source: TRIM Research, Company (UNTR)

Heavy equipment breakdown

Source: TRIM Research, Company (UNTR)

Services sector, fuel growth for our GDP


Services sector contribute almost 50% to the Indonesia GDP growth, especially IT & Telecommunication business, financials, and transportation. Means, Indonesia people keep their spending on telecommunication and
rising people also add contribution to telco sector. Meanwhile in term of investment, sector which attract highest new investment growth (in USD term) were construction, machinery, and transportation.

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13

GDP based on production

Source: TRIM Research, BPS

Loan growth

Source: MoF, TRIM Research, BI

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ECONOMIC FOCUS

14

Risk on China hard-landing


Fears on China hard landing has been disrupting market for the last three years. Chinas economy slowing from
the peak 12% in 2010 to 6.9% by the latest this year (3Q) and a growth below 5% will be a cut-off for what is
called China hard landing. China government has put effort to avoid this happen and we know they devaluate
Yuan by 1.9% and cutting the interest rate by 25bps for the fifth time this year to 4.35% in October.

GDP China vs India vs Indonesia

Source: TRIM Research, CEIC

China shifting economy driver


China slowing economy was the consequence of structural changes from manufacture and investment based to
more service and consumption based. This action being taken for healthier growth in long term. Its manufacturing activity has been slowed to the lowest pace in three years with the PMI index dropped from as high as 56 to
49.9 in October. Meanwhile, the non-manufacturing activity index remained high at 53. This clarifies Chinas shift
from manufacture and investment to more consumption and services based. China is Indonesias number
three biggest export destination which account for 10% of our export. While from the import side,
Indonesia demanded around 20% of total import from China.

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ECONOMIC FOCUS

15

CAD to widen on rising infrastructure activity, weakened rupiah as the consequence


Indonesia external imbalance been saved by declining import activities. Fuel subsidy removal on top of declining
oil price has pressed down Indonesias oil import ~ deficit contributor ~ by 41% YoY YTD 2015. Fuel subsidy
budget lowered from Rp 240tn in 2014 to Rp 64.7tn in 2015 and Rp 63.7tn in 2016, following new fuel subsidy
policy effective per Jan 2015. From non oil & gas, biggest contributor for declining import value were raw materials and capital goods. What we need to watch is that declining import happens in capital goods instead of consumptive product. Its good that our import is decline yet we need to shift our import commodities. Our capital
goods import decline by 16.8% YoY YTD 2015 while consumers product dropped by 15.2% YoY.

CAD

Source: TRIM Research, BI

Services account deficit also narrowed from USD 7.7bn 9M14 to USD 6.5bn 9M15 on more frequent tourist coming post wider visa free and lower cargo loading transportation on slowing import.
Bigger infrastructure spending and pick up on consumption might widen Indonesia CAD to 2.27%% of GDP in
2016 vs 1.90% of GDP in 2015 (est) which lead to currency weakening. Stronger USD post the anticipated US
interest rate hike also will add another pressure to rupiah. We expect rupiah to hover at 14,100/USD by end of
2016 and 13,988/USD average level.

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ECONOMIC FOCUS

16

Non oil & gas import detail

Source: TRIM Research

Trade balance

Source: TRIM Research

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FDI & DDI

Source: TRIM Research

ECONOMIC FOCUS

17

Inflation grounded at our low range estimate in 2015


Inflation going modestly during 2015 and coming down faster than expected. Out of 10 months 2015, Indonesia
experienced deflation 4 times in January & February post Jans fuel price cut and in September & October. Thus,
January-October 2015 inflation only recorded 2.16%. Going conservatively account November-December inflation at 1.5% will result in 3.7% full year 2015 inflation Vs 4.5-5.5% our estimate and 3-5% of BI range.

Inflation

Source: TRIM Research, CEIC

Expect moderate inflation in 2016, which gave room for monetary loosening
We expect moderate inflation for 2016 at 5% on the back of persistently low oil price. Bloomberg consensus expect oil price will hover around USD 55/barrel in 2016. The downside is if oil price jump to USD 70/barrel ~ consistent in 3 months ~ and weakening rupiah is faster than expected. With those moderate inflation level, BI has
room to lower interest rate but we think the central bank should wait for clearer signal from US regarding its
interest rate movement.

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ECONOMIC FOCUS

18

Economy in a brief
Month

Survey

Actual

Previous

CPI Inflation (% MoM)

Oct 15

-0.02

-0.08

-0.05

CPI Inflation (% YoY)

Oct 15

6.38

6.25

6.83

Core Inflation (% YoY)

Oct 15

5.05

5.02

5.07

Trade Balance (USD mn)


BI Rate (%)

Oct 15
Nov 15

725
7.50

1,019
7.50

1,017
7.50

3Q 15

4.80

4.73

4.67

GDP (% YoY)

Revised

1384

Source: Bloomberg, TRIM Research

Inflation re-base
Household expenditure group

2002

2007

2012

Raw food

25.5

19.6

18.9

Processed food, beverage, cigarette, & tobacco

17.9

16.6

16.2

Housing, water, electricity, gas, & fuel

25.6

25.4

25.4

Clothing

6.4

7.1

7.3

Health

4.3

4.5

4.7

Education, recreation. & sport

6.0

7.8

8.5

14.3

19.1

19.2

Transportation, communication, & financial

Source: CEIC, TRIM Research

Nominal and real interest rate

Source: BI, BPS, TRIM Research

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ECONOMIC FOCUS

19

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DISCLAIMER
This report has been prepared by PT Trimegah Securities Tbk on behalf of itself and its affiliated companies and is provided for information
purposes only. Under no circumstances is it to be used or considered as an offer to sell, or a solicitation of any offer to b uy. This report has
been produced independently and the forecasts, opinions and expectations contained herein are entirely those of Trimegah Secu rities.
While all reasonable care has been taken to ensure that information contained herein is not untrue or misleading at the time of publication,
Trimegah Securities makes no representation as to its accuracy or completeness and it should not be relied upon as such. This report is
provided solely for the information of clients of Trimegah Securities who are expected to make their own investment decisions without reliance
on this report. Neither Trimegah Securities nor any officer or employee of Trimegah Securities accept any liability whatsoeve r for any direct or
consequential loss arising from any use of this report or its contents. Trimegah Securities and/or persons connected with it may have acted
upon or used the information herein contained, or the research or analysis on which it is based, before publication. Trimegah Securities may in
future participate in an offering of the companys equity securities.