The Economic Outlook is an event conducted annually by PT Bank KEB Hana Indonesia to provide analysis, insights, knowledge, and forecast on the world and Indonesian economy. Below is the summary that we can conclude from the event
• The global economic recovery will not be evenly distributed, because it is very dependent on how each countries handled the pandemic, one of which is related to the number of vaccine distributions. Vaccines does matter. Countries with wider access to vaccines, will have faster economy recovery
• In Indonesia, our hope is that by the first quarter of 2022, 80% of Indonesians will be fully vaccinated
• Global Economy
- There are no major risks in terms of financial channel regarding Evergrande because the exposure of Chinese banking sector in Indonesia is pretty small. Indirect impact to stock market and bond market in Indonesia is also small.
- But we need to anticipate the trade channel because Evergrande has a potential to slow down China’s economic growth. If this happens, the demand for energy and commodity will decline.
- Because 60% of Indonesia’s export is energy and commodity related, this will have impacted the energy and commodity price as well as Indonesia’s economy.
- The inflation threat in the US will probably come faster than expected, therefore there will be an increase in the interest rate.
- Bank Indonesia maybe will not respond in increasing the interest rate because it will hamper the economic recovery. But if the interest rate is not increased, there will risk of depreciation in the exchange rate.
- The impact on the Indonesian economy will be relatively less compared with what happened in 2013 because the share of foreign holder in our government bond is relatively small compared to 2013
- Commodity Price, Coal and CPO increase substantially due to geopolitical reason caused by China and US tension, and China de-carbonization where the transition is not smooth
- Risk of inflation is all over the world
• Indonesian Economy
- We have gone through the worst period in Quarter 2-2020 where the economic growth was minus 5.32% and then slowly started to improve, and jump significantly in Quarter 2-2021 because we compare it with a low basis, and in that quarter. By easing the mobility in Q2-2002, the economy started to rise.
- During the pandemic, most industries that can be substituted to digital can survive, but market and industries with user experience based such as restaurants, hotels, and tourism dropped significantly.
- The economic activities depend on mobility. Therefore, Indonesia's economic recovery will be in the form of the letter “W” where every time restrictions are imposed, economic activity will decline. And when the activities are opened, the economy will rise.
- This pattern will occur until herd immunity in Indonesia can be achieved
• Banking Sector
- Loan to Deposit Ratio declined because the deposits are increasing but the credit growth declined.
- Savings more than IDR 5 bio grow more than 12% because the upper class group cannot spend their money on leisure, apparel and travel activities so they shifted to increasing their saving.
- The credit growth declined because there is no demand on production and consumption
- Capital Adequacy Ratio is under control because Non-Performing Loan is under 4% due to the government credit relaxation policy.
- Banking industry need to anticipate for when the credit relaxation ended in March 2023
Watch the Hana Bank Economic Outlook 2022 with Dr . Muhammad Chatib Basri and Mr. Jung Yoo Tak in the link below
English Session : Hana Bank Economic Outlook 2022 : Creating a Sustainable Business Post - Pandemic
Korean Session : Hana Bank Economic Outlook 2022 : Creating a Sustainable Business Post - Pandemic
Indonesia Session : Hana Bank Economic Outlook 2022 : Menciptakan Bisnis yang Berkelanjutan Pascapandemi
Presentation materials can be downloaded here
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