Indonesian economy likely to grow 5.2 pct in 2017, BI likely to cut rates in Q4
Source: FxWire Pro - Commentary / 07 Aug 2017 19:21:20 America/New_York
The Indonesian economic growth is expected to accelerate this year. According to an ANZ research report, the GDP is likely to expand 5.2 percent and improve just moderately to 5.3 percent next year. Meanwhile, the country’s inflation is expected to slow down to 3.2 percent next year from 4 percent this year with no administrative adjustments on the horizon.
The policy rates, in the meantime, are expected to remain the same, but a period of balanced growth should be supportive of the IDR bond market, stated ANZ. The supply outlook has deteriorated as the issuance amount was hiked by IDR 33 trillion to fund the higher deficit. Supply risk is to the upside if spending realisation is higher than the DMO’s expectations. The financing position was at 69 percent of gross supply, or 74 percent of net supply. Flush onshore liquidity conditions are expected to remain a main support for frontend issuance while foreign demand is the swing factor in the demand outlook.
“We now expect Bank Indonesia to cut the 7-day reverse repo by 25bps to 4.50% in Q4 2017”, added ANZ.
FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest© FxWire Pro 2018. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.