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Economic & Fixed Income

16 August 2024

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Samuel Daily Economic 16 August 2024

Overview

Indonesia's economy in July 2024 showed mixed signals as the trade surplus narrowed to a 14-month low of USD 0.47 billion, driven by a significant 11.07% surge in imports, suggesting rising domestic demand and supply chain replenishment. However, this could also lead to inflationary pressures and a potential widening of the current account deficit, with GDP growth forecasted to slow to 4.9% in 2024. On the positive side, exports grew by 6.46% YoY, aided by a weaker IDR and robust demand from major trading partners. President Joko Widodo is poised to hand over fiscal responsibilities to President-elect Prabowo Subianto in a crucial State Budget Address, which may indicate future economic policies. Meanwhile, Indonesia’s open unemployment rate has dropped to its lowest since the Reformation Era, and the nation continues to attract investors due to its high carry and growth potential, despite declining interest in state sukuks. The energy sector is seeing significant developments with new projects, including ExxonMobil's planned exploration and ACWA Power's floating solar PV project, while the government is contemplating the early closure of the Suralaya coal plant to tackle Jakarta’s air pollution.

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