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Bank Indonesia: Sep-23

• Bank Indonesia’s unsurprising decision to maintain the BI7DRR at 5.75% is part of a meticulous strategy to control inflation and ensure monetary stability amidst global economic uncertainties, aiming to keep inflation within the target of 3.0 ± 1% in 2023 and 2.5 ± 1% in 2024.
• With robust domestic demand and high consumer confidence, Indonesia’s economy demonstrates resilience and sustainable growth prospects, maintaining a stable economic growth projection of 4.5-5.3% for 2023, backed by strong performances in service sectors.
• The synergy between Government’s fiscal stimulus and Bank Indonesia’s macroprudential policies is fostering economic growth and financial stability. The financial system remains resilient, characterized by a strong banking sector, evident through high CAR and low NPL ratios, with comprehensive policies in place to mitigate potential economic risks.

Indonesia PMI manufacturing 53.9 in Aug-23

- The August Purchasing Managers' Index (PMI) for manufacturing in Indonesia reached 53.9, the highest level seen since October 2021, indicating continued expansion in the sector.
- The PMI reading of 53.9 is also 1.92 points above the one-year average, reflecting a positive trend in the manufacturing sector and suggesting sustained growth in the industry.

Indonesia CPI inflation 3.27% y-o-y (consensus 3.4) in Aug-23

- Indonesia's CPI inflation recorded a year-on-year growth of 3.27% in August 2023, slightly lower than the consensus forecast of 3.4%, indicating a moderate level of price increase.
- The current inflation rate is the highest since June 2023 and remains below both the one-year and long-run averages, suggesting a relatively subdued inflationary environment in the Indonesian economy.

Indonesia PMI Manufacturing 53.9 in Aug-23

- The Indonesia PMI Manufacturing recorded a reading of 53.9 in August 2023, indicating a faster expansion in the manufacturing sector compared to the previous month.
- The PMI value of 53.9 is also 1.92 points higher than the one-year average, highlighting a sustained positive trend in the manufacturing sector's performance.