Key View

• We forecast real household spending in Indonesia to recover over 2021, growing by a projected 3.6% y-o-y. We do note that the economic impact of the Covid-19 pandemic created a significantly low base from which to grow from. We estimate that household spending contracted by 2.7% over 2020.
• The recovery in retail sales and consumer

Key View

• As flood-prone Jakarta continues to sink below sea level, Indonesia’s President Joko 'Jokowi' Widodo has reaffirmed the government’s commitment to relocate Indonesia’s capital to East Kalimantan, with the government expecting that the new planned city will come into use after 2024.
• The plans will require strong investment in East

Key View

• We at Fitch Solutions have revised our monetary policy forecast for Indonesia from expecting 50bps worth of policy rate cuts over the course of 2021 to 25bps.
• We expect the central bank to see less need to support the economy as the economic recovery gradually takes hold.
• Moreover, the central bank will look to conserve some of its

Key View:

• Indonesia’s vehicle sales recovery for 2021 will be further complicated by new variants of Covid-19 that could result in movement restrictions being extended, dampening demand for new vehicles.
• An extension of the suspension of a luxury tax on passenger vehicle purchases that now includes more vehicle types will provide support to

Key View

• We forecast alcoholic drinks spending in Indonesia to grow by 10.8% y-o-y in 2021, following a contraction of 8.9% y-o-y in 2020.
• Total spending on alcoholic drinks will only surpass the pre-Covid level of spending in 2021. Over the medium term (2021-2025), alcoholic drinks consumption will grow by an annual average of 9.6% y-o-y

Key View:

• The South East Asian Region offers the automotive industry diversification opportunities in a highly concentrated global battery supply chain for electric vehicles (EVs).
• Indonesia’s large nickel deposits, coupled with government plans to process raw materials locally, offer opportunities for domestic battery component and cell

Key View: We forecast household spending in Indonesia to begin to recover in 2021, growing by 5.8% y-o-y, after the Covid-19 pandemic led to an estimated contraction of 1.0% in 2020. The Indonesian government started its vaccination programme in mid-January 2021, but provinces with high daily number of new Covid-19 cases still face stricter