The relatively mild expectation of inflation this year, with the Government’s target of 4.00%-6.00%, might give reason for Bank Indonesia (BI) rate to remain at the current level of 6.50%.
As we believe that downside risks to growth have subsided (evident from Indonesia’s economic performance in 2009) and growth momentum is likely to pickup in 2010 (see below), we forecast that BI will hike its policy rates on this account. We also believe that BI is likely to choose the pathway of maintaining a more positive real interest rate level during the current growth recovery period.
OSK-DMG expects 2010 economic growth for Indonesia to come in at 5.70% and private consumption growth at 5.50%. The Indonesian monetary authority’s forecast currently stands at 5.0%-5.5% for 2010. Given the growth-inflation balance, we forecast BI to start hiking interest rates in Q3 10 gradually and end this year at 7.50%.
Tidak ada komentar:
Posting Komentar