2019
ACCE CCELER LERATIN TING G INFRAST INFRASTRUCTU CTURE E DEV DEVEL ELOPM OPMENT ENT THR THROUGH OUGH INN INNOVATIV TIVE E INVES INVESTM TMEN ENT 40
FOREWORD MOCH. RIDWAN KAMIL WEST JAVA GOVERNOR
FOREWORD DONI P. JOEWONO HEAD OF BANK INDONESIA REPRESENTATIVE OFFICE FOR WEST JAVA PROVINCE
NATIONAL ECONOMIC REVIEW
Improving Global Perception …with recent improvements on corruption perception index and governance indicator Global l Compe petitive titivene ness Index Ease of Doing ng Busin iness 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Rank nk 0 Higher rank is better (ranks at the time of annual report publication) 20 20 40 Higher rank is better 36 30 41 60 45 72 40 73 80 91 50 100 60 120 70 140 *New Concepts by using the Global 80 Competitiveness index 4.0 which 160 captures the determinants of long- term growth. 90 Indonesia India Philippines Bulgaria Colombia India Indonesia Philippines World ldwid wide Governa nanc nce Indic icator tors Corruptio uption n Perce cept ptio ion n Index 55 55 Higher score is better 44 52 50 51 42 42 48 45 41 40 40 41 35 38 38 30 36 29 36 25 34 20 Higher rank is better 32 15 2010 2011 2012 2013 2014 2015 2016 2017 30 2012 2013 2014 2015 2016 2017 2018 Voice and Accountability Political Stability/Absence of Violence Government Effectiveness Regulatory Quality Indonesia India Philippines Bulgaria Colombia Rule of Law Control of Corruption
Continuous Improvement of Investment Climate …another leap on Indonesia’s Rank on Ease of Doing Business (EODB)* * Higher rank is better, EoDB 2019 was published in October 2018 - Government efforts to boost business growth through deregulations and de-bureaucratization have been recognized by the improvement of EODB - Structural reforms will continue including in the budget and real sectors Source: World Bank
Indonesia is Now Fully Rated as Investment Grade Country
Indonesia Remains the Investment Destination of Choice Indonesia ia Enjoys ys Lar arge Investments Relative ive to Peers within in the The Economist: Indonesia ia roun unds out the top five of Asian an economies Region that can look forward to increase ased investment spending. (Jan anua uary 2019) 40 China 58,3 GDP (%) India 48,7 35 Indonesia 48,1 t / GD 30 Vietnam 39,8 Singapore 39,2 tment 25 Thailand 38,5 tal Investm Japan 36,4 20 Australia 36,4 15 Malaysia 34,2 Tota Hong Kong 32,1 10 Philippines 31,9 31,59 31,74 31,81 34,47 34,61 34,69 23,63 24,61 24,56 27,04 27,14 28,05 25,01 25,79 26,17 26,57 26,04 25,98 South Korea 5 26,3 Taiwan 25,2 0 Myanmar 22,5 India Indonesia Malaysia Philippines Thailand Vietnam 0 10 20 30 40 50 60 70 2018 2019e 2020e UNCTAD: AD: Indonesia a is listed d in the top 20 host econo nomi mies based d JBIC: Among ASEAN AN countrie ies, Indonesia ia is one of the most on FDI inflo lows, , 2017 17 and d 2018 18 (June ne 2019) 19) preferred plac ace for busin iness investment (November 2018) 300 China 52,2 India 250 46,2 2018 2017 Thailand 37,1 200 Billion USD Vietnam 33,9 Indonesia 30,4 150 US 28,8 100 Mexico 13,7 (x) = 2017 ranking Philippines 10,0 50 Myanmar 8,6 Malaysia 0 8,4 Germany 5,8 Brazil 5,6 Korea 5,1 Taiwan 4,4 % of surveyed who consider each country has promising prospects Russia 3,7 0,0 10,0 20,0 30,0 40,0 50,0 60,0
Indonesia’s Strong GDP Strong ng GDP Growth th Economic growth momentum in Indonesia • % QoQ YoY was maintained in the second quarter of 7,0 2019 despite a backdrop of global 5,065,275,175,185,075,05 5,17 5,18 5,19 5,12 5,05 5,06 5,01 5,01 5,01 4,94 4,93 4,92 4,94 4,82 4,74 4,77 economic moderation. The national 5,0 4,21 4,20 economy expanded 5.05% (yoy) in the 4,01 4,01 3,83 3,74 3,27 3,31 3,19 3,14 3,09 second quarter of 2019, relatively 3,0 unchanged compared with the 5.07% (yoy) recorded in the previous period. 1,0 0,04 The latest economic developments were • (0,16) -1,0 (0,30) (0,36) (0,41) (0,52) influenced by increasing domestic (1,69) (1,73) (1,81) (1,70) demand against a declining external (2,07) -3,0 sector. Domestic demand has increased Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 on the back of rising consumption and 2014 2015 2016 2017 2018 2019 stable investment, although inventories have decreased. Favo vour urable ble GDP Growth th Compar pared to Peers Meanwhile, the external sector was • % weighed down by decreasing exports as 9,0 a corollary of global economic 7,3 8,0 moderation and fresh fears concerning a 7,5 7,0 potential furtherance of the trade war. 6,6 6,0 6,5 5,2 5,0 5,2 4,0 3,5 3,6 3,0 3,3 3,0 2,0 1,0 0,0 2012 2013 2014 2015 2016 2017 2018 2019* 2020* Bulgaria Colombia India Indonesia Philippines
External Balance under Control Supported by Adequate Reserves
Exchange Rate In Line with Fundamentals The The ru rupia iah con ontin tinues to to move ve in in lin ine wit ith the he curre rrency' y's fu fundamenta tal va value, the hereby reinforc forcin ing exte ternal re resil ilie ience. Point-to- point, the rupiah gained 0.8% in July 2019 compared with the level recorded at the end of June 2019, and by 1.3% compared with the June average in 2019. The stronger rupiah was supported by an influx of foreign capital inflows based on the positive perception of non-resident investors regarding the national economic outlook as well as the attractiveness of domestic financial assets. Mirroring global currency movements, the rupiah depreciated in August 2019, weighed down by global financial market uncertainty as trade tensions between the USA and China escalated, triggering 1.6% (ptp) depreciation or 1.4% on the July average in 2019. As of 21st Aug 2019, the rupiah appreciated 0.98% (ptp) compared with conditions at the end of 2018. Moving forward, Bank Indonesia expects stable rupiah exchange rates in line with maintained market mechanisms. Furthermore, projected currency stability is supported by the prospect of foreign capital inflows to Indonesia on sound domestic economic performance and attractive returns, as well as the favourable impact of looser monetary policy in advanced economies.
: 35.377,76 km 2 Area Coordinates : 6 o 45’S 107 o 30’E Topography : Lowlands, Mountains, & Coasts Populations : 48,037,83 (2017) Density : 1,358 people per sq km (2017) Productive age : 32.67 million (age 15-64) -2017 Governor : Moch. Ridwan Kamil Area: 35 35,377.76 76 square West Java Min. Wage Rate : USD 120.24 – USD 301.56 (2019) Vice Governor : Uu Ruzhanul Ulum kilometers . Capital City : Bandung City West Java Total Population: 48 48 milli lion Regencies/Cities : 18 Regencies and 9 Cities people le or or 18 18.1% of Indonesia Total Governor : Moch. Ridwan Kamil Vice Governor : Uu Ruzhanul Ulum Population. Capital City : Bandung City With populat ation growth ar around 1.34 34% each Regencies/Cities : 18 Regencies and 9 Cities year , West Java total population in 2021 is expected to reach 50 50 million people people . 12,9% 13,09% 24% 19% 48,03 M Market Potentials As the most populous province in Indonesia, West Java offers the biggest potential market, with growing number of middle-class households
Economic Growth of All Provinces in Java National and West Java Economic Growth (yoy) 7,0 5,68 6,0 5,0 5,05 4,0 3,0 2,0 1,0 West Java National 0,0 I II III IV I II III IV I II III IV I II III IV I II III IV I II 2014 2015 2016 2017 2018 2019 Top Sectors with Highest Contribution to GRDP (as of Q2-2019) AGRICULTURE MANUFACTURING 7% 43% In the second quarter of 2019, West Java 6,25 5,40 13,49 economic growth rose to 5.68% (yoy). Such 3,33 6,87 growth was stronger than national -0,91 performance at 5.05% (yoy). West Java growth Q4-2018 Q1-2019 Q2-2019 Q4-2018 Q1-2019 Q2-2019 in this quarter was supported by sharp growth TRADE & RETAIL CONSTRUCTION 15% 9% in agriculture, robust growth in trade and retail 7,91 7,13 as well as stable performance in construction 9,79 6,61 5,12 3,03 sector. Q4-2018 Q1-2019 Q2-2019 Q4-2018 Q1-2019 Q2-2019
In September 2019, West Java inflation was under control. It was still within the national target corridor of 3.5±1% (yoy). Inflation of All Provinces in Java National and West Java Inflation % (yoy) West Java National 5,0 3.85 4,0 3,0 3.39 2,0 1,0 0,0 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 West Java Inflation Aggregation 2016 2017 2018 2019 % (yoy) % (yoy) 15 5 • In September 2019, West Java CPI recorded a 3.85 deflation at 0.24% (mtm), decreased compared 10 to infation in the month earlier of 0.39% (mtm). 3 • Consequently, on annual basis, CPI inflation 4.99 5 stood at 3.85% (yoy), still within the national 4.32 target corridor of 3.5±1% (yoy). 1 1.53 0 • CPI inflation remained controlled within the 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 target as supported by relatively stable AP -5 -1 inflation and very low VF inflation in the midst of 2016 2017 2018 2019 relatively high core inflation. CPI y-o-y (rhs) Core y-o-y Administered Prices y-o-y Volatile Food y-o-y
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