Business and Finance Information

Archive for April, 2007

You can say pretty good. The indicators of macro-economy is still stable and some even more powerful. Rupiah’s exchange rate relatively stable several months at the rate Rp 8,000 per U.S. dollar. Many groups, among others, Kwik Kian Gie from the PDI-Struggle, wanted the exchange rate is stronger. But first, the exchange rate should not be set by the government and market forces should determine this. Second, if it becomes the rupiah, or set at Rp 5,000 per U.S. dollar will hurt exports, although on the other side will be greeted by large companies who must pay dollar debts. The amount of inflation cumulative seen until now and which can still be expected in the year 1999 this, the rupiah between Rp 7,000 and 8,000 more “suitable”. It should be remembered that much depends on the economic recovery of the increased exports.

Two-month inflation rate is very low, even for May consumer price index fell slightly. This is a macroeconomic phenomenon well. However, making real interest rates (ie, the nominal rate minus inflation) becomes very high. Interest rates declined and “negative spreads” (deposit interest rate is higher than for loans), which caused huge losses for banks, have started to disappear. This is very beneficial restructuring of the banking sector.

According to BPS head quarter GDP growth rate in 1999 was positive (1.34%) although this is only because the good performance of the agricultural sector. If this trend continues then the rate of GDP growth in 1999 could be a small positive.

Balance of trade surplus is growing. This strengthening foreign exchange reserves. This phenomenon is also good. However, why is not good. Exports did not increase (much), but imports are still declining. Decrease in imports is a symptom that is not good. The number of imports is a reflection of the level of public consumption (which is not too down in the midst of this crisis), the level of manufacturing production to markets at home and abroad, and import goods for investment and development. Monthly import figures are still low, less than $ 2 billion per month, showed that activity in the real sector is still very weak. There was no recovery in the manufacturing industry, even production for export is still grappling with many difficulties, such as working capital from the banking sector, lack of competition in overseas markets because delivery orders are seen contains a security risk because of the state. Read the rest of this entry »