Indonesia: Lower GDP and rate cut – Standard Chartered

Indonesian GDP growth forecast has been lowered by Aldian Taloputra, an economist at Standard Chartered Bank, who is also expecting the Bank Indonesia (BI) to cut the policy rate. USD/IDR trades at 14645.

Key quotes 

“We lower our GDP growth forecasts to reflect the deeper-than-expected economic impact of the coronavirus outbreak and the collapse in crude oil prices. We now expect growth to slow to 4.8% in 2020 (previously 5.0%) and 5.0% in 2021 (previously 5.2%).”

“We now expect Bank Indonesia (BI) to lower the policy rate by 25bps in both March and June; we previously expected no further cuts.”

“We lower our 2020 average inflation forecast to 3.1% from 3.6%, as lower crude oil prices could delay energy price adjustments.”