カントリーリスクレポート - インドネシア
Indonesia Country Risk Report Q4 2019
|発行||Fitch Solutions, Inc.||商品コード||180745|
|出版日||ページ情報||英文 61 Pages
At Fitch Solutions, we are maintaining our forecast for Indonesia's GDP growth to come in at 5.3% for 2019. We believe that looser fiscal and monetary policies will
boost government spending and investment in Indonesia over the coming months. However, net exports will likely act as a slight drag on growth as Indonesia's
main trading partners face economic headwinds exacerbated by trade tensions.
We expect Indonesia to meet its fiscal deficit target of 1.8% of GDP for 2020, as outlined in the budget draft presented on August 16 and will mark a narrowing
from the 2.0% deficit which we forecast in 2019. Indonesia's 2020 budget continues to focus on investing in human capital and infrastructure, which we believe
will help to improve productivity over the long term. Given our expectation for higher GDP growth and commodity prices in 2020, we believe that the revenue
growth target of 9.3% is achievable.
We now expect Bank Indonesia (BI) to cut its seven-day reverse repo rate by 25bps to 5.25% by the end of 2019, following a 25bps rate cut at BI's monetary policy
meeting on August 22. Given the slowdown in economic growth in H119, we expect BI to continue to focus on stimulating economic activity. A dovish Fed and
well-managed inflation will provide room for BI to cut its benchmark interest rate without placing too much strain on Indonesia's macroeconomic stability. That
said, we highlight that risks are to the upside in the event of a spike in volatility which would see the rupiah come under significant selling pressure.
We believe that Prabowo Subianto could likely join President Joko 'Jokowi' Widodo's coalition, which should help the government obtain a supermajority in parlia-
ment. The addition of Gerindra, led by Prabowo, to Jokowi's ruling coalition would help to reduce the polarisation resulting from the April presidential election
and allow Jokowi to push ahead with his reform agenda with greater ease. A partnership between Jokowi and Prabowo would also reduce the risk of political
Islam in Indonesia, which we have been highlighting for the past few months.
At Fitch Solutions, we maintain our forecast for the Indonesian rupiah to average IDR14,350/USD, as we expect risk-off sentiment to remain elevated. That said,
terms of trade will likely improve as the prices of Indonesia's top two exports pick up, which will provide some support to the rupiah. For 2020, we maintain our
forecast for the rupiah to weaken to an average of IDR14,600/USD, as we believe that the unit will remain under pressure due to a persistent twin deficit, and
elevated inflation in Indonesia vis-a-vis the US.
Risks to our real GDP forecasts are skewed to the downside. A prolonged escalation of the US-China trade war would weigh on investment sentiment in Indonesia.
Moreover, given that the Indonesian rupiah is vulnerable to capital flows, particularly during periods of risk aversion, BI may hold (or even hike) its benchmark
interest rate to defend the currency if the US-China trade war results in selling pressures on emerging market assets.
Risks to our interest rate forecast are to the upside. While the rupiah has remained broadly stable in recent weeks, an event that triggers global risk aversion, such
as a further escalation of the US-China trade war, could lead to a sell-off in risk assets and emerging market currencies similar to during the second half of 2018.
Under such a scenario, the rupiah would be quite vulnerable to significant volatility and a sell-off given the high level of foreign ownership of government debt
which stands at around 40% of the total stock. This could see BI hold (or even raise) its benchmark interest rates to curb portfolio outflows and rupiah volatility.
Risks to our rupiah forecast are to the upside. If the US and China reach a trade agreement before 2021, market sentiment could improve and see the rupiah
coming in stronger than what we expect.
Indonesia Country Risk Q4 2019fitchsolutions.com