BMI View: Economy Continues To Slow Into 2014; Recovery In 2015
Following on from our comments in our last quarterly report, we continue to see Indonesia undergoing an adjustment process which will see lower growth on the short term, as the authorities seek to cool and rebalance an economy that had over-heated. Quarterly growth was below expectations in Q313, but then above expectations in Q413. Despite this fluctuation the economy in our view remains on a slight downtrend as efforts are made to narrow the current account deficit, squeeze out inflation, and tighten monetary policy. For full-year 2013, GDP growth was 5.8%, the lowest level in four years. We are predicting a further slowing to 5.4% GDP growth in 2014 (no change compared to our last quarterly report), picking up to 6.5% growth in 2015. For this year private consumption growth will slow, government spending is likely to increase (this is an election year), investment will fall, and net exports will make a small recovery. Our long-term outlook remains sanguine, with real GDP growth projected to average 6.2% per annum over the coming decade. Much of this, however, will be driven by strong growth in fixed capital. Should improvements in the investment climate stall or reverse - after all, the country is still ranked at a lowly 120th in the World Bank's Doing Business 2014 report - Indonesia could fail to realise its strong growth potential.
Our freight transport forecast for 2014 shows a significantly slower pace of growth, as the economy slows. This slowdown will be partially offset by something of a recovery in foreign trade that we expect during the course of the year. On the medium to longer term we continue to think that the key to sustainable growth is investment in port infrastructure, including road and rail links in the hinterland areas. We are encouraged to see some evidence of progress on this front. Capacity problems remain an issue, but new investment projects in ports, airports, road, and...
The Indonesia Freight Transport Report has been researched at source, and features latest-available data covering commercial transport and logistics by road, rail, air and water; industry forecasts, company rankings covering leading national and multinational operators; and analysis of latest industry trends, opportunities, projects and regulatory changes.
Business Monitor International (BMI)'s Indonesia Freight Transport Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Indonesian freight transport and logistics industry.
- Benchmark BMI's independent freight transport industry forecasts on Indonesia to test other views - a key input for successful budgetary and planning in the strategic freight transport market.
- Target business opportunities and risks in the Indonesian freight transport sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Indonesia.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs, and latest activity).
BMI Industry View
Summary of BMI's key industry forecasts, views and trend analysis covering freight transport and logistics, regulatory changes, major investments and projects and significant national and multinational company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the freight sector and within the broader political, economic and business environment.
Industry Trends And Developments
Analysis of latest projects across the freight transport sector (road, rail, air, sea and logistics) including market overview which provides an outline of the key elements driving development.
BMI Industry Forecasts
Historic data series and forecasts to end-2018 for all key industry and macroeconomic indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including:
Transport Sector: Sector Value (US$bn); sector real growth (%); employment (`000); total freight carried by road, rail, inland waterways, maritime, air and pipeline (mn tonnes-km/mn tonnes)
Trade: Exports and imports (US$mn) by category of goods (manufactured goods, food, chemicals etc.); top-5 import and export trade partners (US$mn); imports/exports to each global region (US$mn)
Port Data: Throughput (`000 tonnes) and container throughput (TEU) for all major ports in the state
Oil Products Prices: Price forecasts for gasoline and aviation fuel (US$/bbl) at all major global energy trading hubs
Economic Indicators: Nominal GDP (US$bn); real GDP growth (%); GDP per capita (US$); industrial production (%); unemployment (%)
Details of the freight infrastructure in each state by segment (road, rail, air, water and pipelines). Full analysis of the competitive landscape within each segment.
The freight reports contain a chapter detailing the political outlook of a given region, examining the domestic politics, long-term outlook and foreign policy, and assessing the impact this could have on freight and transport businesses.
Examines the short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT (Strengths, Weaknesses, Opportunities and Threats) analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.