Indonesia Business Forecast Q1 2007

Content

• Executive Summary
  • Focus On 2007
• Chapter 1: Political Outlook
  • SWOT Analysis
  • BMI Political Risk Ratings
  • Tense relations between the president and vice-president could hamper efforts to enact reforms that are
  • desperately needed to encourage investment As the 2009 elections - in which the former running mates
  • are expected to compete against each other - approach, the friction may kick up a notch
  • Domestic Politics
  • Political Strife May Stall Reform Drive
  • Table: Indonesian Cabinet & Other Key Posts (As Of december 2006)
• Chapter 2: Economic Outlook
  • SWOT Analysis
  • BMI Economic Risk Ratings
  • Introduction
  • Economic Activity
  • In Recovery
  • We revised our 2006 GDP forecast to 52% from 50% earlier A revitalisation of private consumption
  • should ensure that the economy expands at a faster pace in 2007 - at 62% Investment however, remains
  • the chief problem that the government will need to address to maintain a buoyant long-term growth trend
  • Table: GDP And Population
  • Exchange Rate Policy
  • Fundamental IDR Strength
  • Indonesia's improving macroeconomic fundamentals will continue to support rupiah appreciation in the
  • medium term, allowing the unit to revert to stability following its recent bout of weakness While the central
  • bank will certainly keep a watch on forex movements and its effects on export competitiveness, we do not
  • expect this appreciation will warrant any major attempts at intervention
  • Table: Exchange Rate
  • Monetary Policy
  • More Rate Cuts In 2007
  • The series of rate cuts enacted by the central bank in 2006 will help encourage private sector activity in
  • 2007, but we do not envisage the easing of monetary policy to stop there Further reductions in the Bank
  • Indonesia rate are expected, to 900% by year-end 2007
  • Table: Prices And Interest Rates
• Chapter 3: Special Report
  • BMI Sovereign Risk Ratings
  • Table: BMI Sovereign RIsk Ratings
  • Asia
  • Table: Asia Sovereign Ratings - Evolution of Ability to Pay
  • Table: Asia Sovereign Ratings - Evolution of Willingness to Pay
• Chapter 4: Business Environment
  • SWOT Analysis
  • Legal Framework
  • Labour Force
  • Table: Demographic Indicators (2005)
  • Table: Employment Indicators
  • Foreign Investment Policy
  • Table: Indonesia, Annual FDI Inflows
  • Table: Asia, Annual FDI Inflows
  • Foreign Trade Regime
  • Table: Top Export Destinations
  • Table: Value Of Exports By Category (US$mn)
  • Tax Regime
• Chapter 5: Key Sectors
  • Defence
  • Security
  • Table: Indonesia Historical Data and Forecasts
  • Petrochemicals
  • Market Overview
  • Foreign investment in the petrochemicals industry is estimated to reach US$4bn in 2006 Since per capita
  • consumption of plastic is still low in Indonesia, the country's demand for ethylene and propylene is forecast to
  • increase The nation's PE market is forecast to grow 6% y-o-y through 2010 However, rising fuel costs are likely
  • to affect the industry's competitiveness Dwindling natural gas reserves may also endanger Indonesia's
  • dominance in the world market for liquefied natural gas
  • Table: Indonesia Petrochemicals Sector: Data and Forecasts