SEO Version
Manager’s Report
Market Review
Indonesian Key Economic Indicators
2011
2010
2009
2008
Economic growth (%Y o Y)
6.50
6.10
4.50
6.10
Infation rate (%)
3.79
7.00
2.80
11.10
Year-end Exchange rate (IDR/SGD)
6,903
7,057
6,701
7,714
Average Exchange Rate adopted in fnancial statements (IDR/SGD)
6,939
6,698
7,163
6,797
Interest Rate - Central Bank Rate (%)
6.00
6.75
6.50
9.25
10 Year - Indonesian Govt Bond Rate (%)
6.03
7.61
10.06
11.89
Economic REVIEW
Indonesia’s economy grew last year at its fastest pace since the
1997-98 Asian crisis, with the country’s vast domestic market
helping to insulate it from the global economic downturn which
were battering its more export-oriented neighbors. Together
with two rate cuts in the last quarter, President Susilo Bambang
Yudhoyono’s government was able to notably increase gross
domestic product in 2011. The country regained investment-
grade rating from Moody’s Investors Service and Fitch Ratings
for the frst time since the 1997 Asian fnancial crisis, boosting
investment prospects as it plans transport and utility projects.
Gross domestic product expanded 6.5% in 2011, afrming
Indonesia’s position as one of Asian’s fastest growing economies
and re-emphasizing the appeal to investors. The country’s growth
in 2011 was the fastest since 1996, according to International
Monetary Fund data. The US$707 billion economy has
expanded more than 6% for fve straight quarters, showing
it is weathering a decline in global demand that has impact
growth across Asia. Along with the expanding economy,
per capita income rose 18% to Rp 31.8 million last year from
Rp 27.1 million in 2010.
Infation continued to decrease in 2011, thanks to the
government’s efort to manage costs in the country. By end of
December 2011, infation was about 3.79% y-o-y, falling from the
4.61% recorded at end - September 2011. In case of 2012, the
Central Bank has set the infation in a range of 3.5% to 5.5%.
Concerns over the global economic outlook has somehow
triggered the Central Bank to trim its key interest rate by a
total of 75 basis points in October and November, bringing
the rate to a record low 6% as part of the move to protect the
nation’s economy.
Economic Developments
In recent years, many analysts and economists have touted
Indonesia as the next India or China, as strong growth and
relative political stability boost confdence in its fortunes,
although its growth has laggedwell behind those regional giants.
Investment activities remained upbeat with Foreign direct
investment in Indonesia grew 20% to a record $20 billion
last year as companies invested in areas such as coal mines,
infrastructure developments and car factories to tap
the country’s vast natural resources and 245 million-strong
consumer market.
President Susilo Bambang Yodhoyono also plans to boost
government capital spending by 19% to 168 trillion rupiah
(S$23.4 billion) this year to improve infrastructure such as
railways, airports and roads, whilst Indonesia’s parliament
approved in December 2011 a land-acquisition bill that will
allow the government to accelerate these projects. Meanwhile,
exports hit a record of $203.6 billion last year, yet their share
of Indonesian GDP rose only marginally—to 26.3% in 2011,
from 24.6% in 2010.
Sources: Indonesian Central Bureau of Statistics, Bank of Indonesia, Bloomberg, Ministry of Finance, December 2011
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Lippo Malls Indonesia Retail Trust
Annual Report 2011
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