Key View

• We at Fitch Solutions anticipate heightened uncertainty in Indonesia in 2023, amid renewed speculation that President Joko Widodo may extending his political influence beyond his final presidential term, which ends in 2024.
• While this would bode well for policy continuity, we note that the Widodo administration has a mixed track

Key View

• We at Fitch Solutions believe Indonesia’s latest export ban on bauxite, and potentially copper concentrates and tin ingots, will hurt the mining sector as the downstream industry is not fully established yet.
• Indonesia’s bauxite export ban follows its 2020 nickel ore export ban and previous mineral export bans of 2014, aimed at

Key View

• The slowdown in Indonesian real GDP growth to 5.0% y-o-y in Q422 was more gradual than most anticipated, but at Fitch Solutions we continue to expect that conditions will deteriorate further in 2023.
• Exports are likely to be a weak spot due to lacklustre external demand. The softening prices of key commodities, elevated inflation and

Key View

• Bank Indonesia’s 25bps rate hike in January 2023 was accompanied by signs of renewed dovishness, suggesting that interest rates in Indonesia may have already peaked.
• For now, we at Fitch Solutions retain the view that the cycle will end with one further 25bps hike, which would bring the seven-day reverse repo rate to 6.00% in

Key View: In 2023, EV adoption in Indonesia will be supported by supportive government policy to encourage local EV adoption. In March 2021, the ministry of finance rolled out a revised structure for the PPnBM applicable to EVs. Luxury sales taxes on battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) are now fully

Key View

• At Fitch Solutions, we expect that the pace of reform in Indonesia will continue to gain momentum over the coming quarters.
• Crucially, some measures such as efforts to reduce coal reliance and fuel subsidies signal that the government has become increasingly willing to pursue reforms that are typically contentious.
• That said, with

Key View

• Mainland China's BRI continues to play a pivotal role in the autos industry by facilitating collaboration and investment opportunities among autos-related stakeholders and markets participating in the BRI.
• We find that there has been an increase in autos-related investments due to the creation of new BRI partnerships (Indonesia

Key View:

• While Indonesia’s trade surplus widened in late 2022, we expect that the overall current account will flip from a surplus of 0.3% of GDP this year to a deficit worth 1.0% of GDP in 2023.
• This shift will be driven by lower commodity prices and the slower growth of service exports.
• Over the longer term, we expect that Indonesia’s

Key View

• The 5.7% y-o-y increase in Indonesia’s Q322 real GDP is likely to be the peak for growth, as elevated inflation, diminishing policy support, and weakening external prospects will trigger a broad-based slowdown over the coming quarters.
• At Fitch Solutions, we expect that Indonesian economic growth will rebound from 3.7% in 2021 to 5.2

Key View

• Bank Indonesia (BI) delivered a back-to-back 50 basis point hike on October 20 and further increases are likely to follow against the backdrop of a depreciating Indonesian rupiah and high inflation.
• However, mounting growth headwinds as a result of weakening global demand, and a moderation in the pace of tightening by major central