2012-05-05 03:21:55 - Recently published research from Business Monitor International, "Indonesia Business Forecast Report Q2 2012", is now available at Fast Market Research

Core Views I ndonesia will remain a key outperformer within South East Asia. The country, which is insulated to some extent from turbulence in the global economy as a result of strong domestic consumption, has maintained solid growth rates even as many of its regional peers began to falter. S trong current account surpluses combined with record foreign direct investment inflows continue to bode well for financial stability, supporting economic growth and ensuring broad rupiah stability. T he infrastructure sector will be crucial in allowing Indonesia to maintain its strong economic growth rate, with local-national government conflicts and regulatory challenges posing key risks to the country's economic outlook. Major Forecast Changes We have lowered our average 2011 and 2012 headline

consumer price inflation forecasts to 5.4% and 4.5% from 6.0% and 5.8% respectively due to signs of moderation in commodity price inflation and falling money supply growth. We have lowered our end-2011 Bank Indonesia policy rate forecast to 6.00% from 6.75% on the back of the bank's recent dovish shift. We also have nudged down our 2012 interest rate forecast from 7.00% to 5.75%, pencilling in just one cut next year. Risk to this forecast is still to the downside, as Bank Indonesia may be pressed to shift to more accommodative policy. We expect inflation to become less of a concern as growth attainment returns to the forefront. Key Risks To Outlook Downside Growth Risks From Hot Money Outflows: Indonesia's current account could come under pressure should a serious bout of global risk aversion create acute financial instability. Bank Indonesia has been very supportive of the rupiah but may not be able to continue to prop the currency up if global conditions continue to deteriorate over the long-term. Upside Long-Term Growth Risks From Structural Reforms: High levels of corruption and red tape have been hindering investment growth. Should reforms be pushed through at a quicker pace than we expect, foreign direct investment inflows would surge, indirectly pushing up economic growth.


Full Report Details at
- www.fastmr.com/prod/359260_indonesia_business_forecast_report_q2 ..


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Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010

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