30 Jan 2015
Indonesia might see sub-par growth – Nomura
FXStreet (Barcelona) - Research Analysts at Nomura expect Indonesia to see sub-par growth at 5.2%, with their forecast underpinned by low progress in infrastructure spending, a relatively tight monetary policy and low commodity price environment which could cap consumptions and investment spending.
Key Quotes
“We remain sceptical that infrastructure implementation will go ahead as planned this year, and there is a risk that fuel subsidies could again increase, which, coupled with likely below-target tax revenues, could shrink the government’s fiscal space.”
“The political environment has improved, but new concerns are emerging that underscore the fact that the president may constantly face a tight balancing act.”
“Meanwhile, Bank Indonesia is unlikely to cut policy rates any time soon due to a possible worsening of the current account deficit. This means little support for private consumption and investment spending, which may face significant headwinds from low commodity prices.”
“We reiterate our forecast that GDP growth will remain sub-par this year at 5.2%.”
“External risks also remain significant.”
Key Quotes
“We remain sceptical that infrastructure implementation will go ahead as planned this year, and there is a risk that fuel subsidies could again increase, which, coupled with likely below-target tax revenues, could shrink the government’s fiscal space.”
“The political environment has improved, but new concerns are emerging that underscore the fact that the president may constantly face a tight balancing act.”
“Meanwhile, Bank Indonesia is unlikely to cut policy rates any time soon due to a possible worsening of the current account deficit. This means little support for private consumption and investment spending, which may face significant headwinds from low commodity prices.”
“We reiterate our forecast that GDP growth will remain sub-par this year at 5.2%.”
“External risks also remain significant.”