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• We at Fitch Solutions retain our view that Bank Indonesia (BI, the central bank) will keep its policy rate unchanged at 3.50% for the rest of 2021 before looking to tighten the rate by 50 basis points (bps) in 2022.
• The BI could also start tapering its quantitative easing programme in 2022 as other major central banks look to taper

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• We have revised Indonesia’s construction growth forecast, for construction industry value to grow by 2.7% this year and 8.4% in 2022 in real terms. While we continue to expect a broad recovery in Indonesia's infrastructure sector from this year, recovery will occur at a much lower rate than our initial expectations.
• The recovery of

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• Indonesia's crude oil and natural gas production growth outlook continues to be downbeat.
• Indonesia’s regulatory environment continues to be among the most complex in the region and remains a stumbling block for many investors.
• Pervasive resource nationalism in the sector also would do little to appeal to potential investors more

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• We at Fitch Solutions have revised down slightly Indonesia’s short-term political risk index (STPRI) to reflect rising constraints to policymaking amid the country’s Covid-19 health crisis.
• Indonesia’s health crisis has considerably derailed the government’s reform plans and led to a shift in spending priorities away from longer-term

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• In this article, we at Fitch Solutions assess Indonesia’s potential along the battery supply chain.
• Indonesia’s battery supply chain is still in its nascent stage, but the country is well placed to benefit from the global EV adoption race in the coming years through its natural resource endowment (nickel, copper) and government

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• We at Fitch Solutions have further revised down our forecast for Indonesia’s real GDP growth from 4.4% in 2021 to 3.9%.
• Though the Indonesian economy grew by 7.1% year-on-year in Q221, some of this was owing to low base effects from Q220 when the economy contracted by 5.3%.
• Amid rising concerns about the prolonged impacts of the

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• We at Fitch Solutions have revised our forecast for Bank Indonesia (BI, the central bank)’s monetary policy trajectory and now expect the benchmark rate to stay at 3.50% for 2021, versus a 25bps cut previously.
• Even as the Indonesian economy is set to recover at a slower pace amid the ongoing Covid-19 outbreak, we expect BI to keep

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• Indonesia is grappling with new Covid-19 strains, including the highly infectious Delta variant first identified in India.
• Indonesia’s vaccine rollout has been slow.
• Unprecedented crisis has highlighted the need to increase investment in the healthcare sector in the country.

Indonesia is grappling with new Covid-19 strains

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• The average Indonesian household will spend 31.7% of their total household budget on food in 2025, marginally increasing from 31.1% in 2010.
• Poultry products will see significant consumption and spending growth as opposed to beef, due to the significantly higher price and inflation of beef products.
• Spending on fruits by Indonesian