Indonesia Macro Update - INF 02 Jan 2024
KBVS MACRO UPDATE
Tuesday, 2 January 2024
Easing Inflation: SBN Become More Attractive Amid GDP Growth Expansion Potential
In Dec‘23, Indonesia's inflation rate eased to 0.41% MoM or 2.61% YoY (Cons: 2.74% YoY, KBVS: 2.70% YoY, Prev: 2.86% YoY). We expect this trend to continue, as further decreases in Non-Subsidized Fuel prices are anticipated from 1 Jan '24, ranging between -1.12% MoM (Pertamax) to -6.79% MoM (Pertamina Dex).
These conditions have led the SUN10Y real yield standing at 396.80 bps in Dec '23. Meanwhile, the S&P Global Indonesia Manufacturing PMI in Dec '23 continued to strengthen at 52.2 (Prev: 51.7). We anticipate these favorable conditions to persist.
Furthermore, the anticipated low inflation is expected to strengthen the potential for economic growth in 4Q23, with the KBVS’s forecast for GDP Growth Rate at 5.15% YoY.
Regards,
Fikri C Permana - KBVS Research Team