During 1–15 September, the Nikkei Manufacturing Purchasing Managers' Index (Nikkei PMI), a leading indicator for economic conditions, was announced for each ASEAN economy, amongst other critical macroeconomic indicators. Also during that time, the Central Bank of Malaysia (Bank Negara Malaysia, BNM) held the Monetary Policy Committee (MPC) Meeting, while Indonesia began ramping up its infrastructure development and construction. Please refer to the table attached at the end of the report for an overview of the macroeconomic indices for ASEAN economies.

1. 01
ASEAN Macroeconomic Trends:
Indonesia Ramping Up Infrastructure Development; Malaysia Maintaining Interest Rate
By Takashi Kawabata - SPEEDA Chief Asia Economist,
Translated by Yiqing Wang
During 1–15 September, the Nikkei Manufacturing Purchasing Managers' Index (Nikkei PMI), a leading
indicator for economic conditions, was announced for each ASEAN economy, amongst other critical
macroeconomic indicators. Also during that time, the Central Bank of Malaysia (Bank Negara Malaysia,
BNM) held the Monetary Policy Committee (MPC) Meeting, while Indonesia began ramping up its
infrastructure development and construction. Please refer to the table attached at the end of the
report for an overview of the macroeconomic indices for ASEAN economies.
20170925

2. 02
ASEAN Macroeconomic Trends:
Indonesia Ramping Up Infrastructure Development; Malaysia Maintaining Interest Rate
Indonesia: Noticeable Progress in Infrastructure Development
Although Indonesia’s retail sales decreased by 3.3% YoY in July, this is thought to be a reactionary
decline from the strong consumption activities that lasted until the Lebaran holiday, which marks the
end of the fasting month of Ramadan in the Islamic calendar, as mentioned in the previous report.
As the period of Ramadan, which is determined based on the Islamic lunar calendar, changes every
year in the Gregorian calendar (e.g. 2016 Ramadan: 6 June–5 July; 2017 Ramadan: 26 May–24 June),
statistical comparisons on a year-on-year basis tend to be irregular.
Inflation rate (CPI) growth continued to slow for the second consecutive month from its peak level of
4.4% YoY in June, standing at 3.8% YoY in August. Moreover, core CPI growth decelerated for the fifth
consecutive month to 3.0% YoY in August from the 3.4% YoY recorded in February. Overall, the country
is undergoing gradual inflation with the exception of food and energy prices.
Apart from economic indicators, Indonesia has been progressing with its infrastructure development
through, for example, the construction and maintenance of airports and harbours. Local media has
also been reporting new projects with specific dates and periods provided, including those facilitated
by the Japan International Cooperation Agency (JICA).

3. 03
ASEAN Macroeconomic Trends:
Indonesia Ramping Up Infrastructure Development; Malaysia Maintaining Interest Rate
Lately, the construction projects for a high-speed railway that connects Jakarta and Bandung, which is
led by China, and a new airport in Karawang, West Java are reported to have been facing difficulties.
Major news and updates in connection with the country’s infrastructure projects are summarised
below.
- The completion rate for the construction of a high-speed railway connecting Soekarno–Hatta
International Airport and Indonesia’s capital city Jakarta reached 82% (according to Budi Karya
Sumadi, the Minister of Transportation).
- The expense for the remodelling of Terminal 2 at Soekarno–Hatta International Airport is
estimated to reach IDR 3.2 trillion (USD 240.96 million). The remodelling work, despite a lack of a
detailed time frame, is scheduled to start after the construction of Terminal 3 is launched. The
construction of Terminal 3, originally planned for April 2017, was postponed due to the significant
delay in land acquisition. The construction of Terminal 4 is planned for 2019 (according to Angkasa
Pura, an Indonesia state-run airport management enterprise).
- The construction of Patimban Port, located in Subang, West Java Province, is expected to be
launched in early 2018, funded jointly by the JICA (providing a loan of roughly JPY 109.7 billion, or
USD 1.0 billion) and the Indonesian government (public budget of USD 90 million). The Phase I
and Phase II construction works are planned to be completed in 2019 and 2023, respectively
(according to the Ministry of Transportation).
- The completion rate of the redevelopment project (Phase I) for Kuala Tanjung Port in North
Sumatra Province has reached around 80% (according to state-owned port operator Pelindo I).
- The Jakarta Light Rail Transit (LRT) project is expected to conclude a funding contract in November
2017 (according to Luhut Binsar Pandjaitan, Coordinating Minister for Maritime Affairs).
- The construction of Bogor-Sukabumi double track railway is scheduled to begin within 2017, with
the total investment value amounting to IDR 400 billion, or USD 30.12 million (according to Budi
Karya Sumadi, the Minister of Transportation).

4. 04
ASEAN Macroeconomic Trends:
Indonesia Ramping Up Infrastructure Development; Malaysia Maintaining Interest Rate
Despite the major news of China winning the bid for the construction of high-speed railways in
Indonesia, the project is currently beleaguered with dim prospects. Photo by Reuters/Aflo
- For the high-speed rail connecting the capital city of Jakarta and Bandung, West Java, existing lines
will likely be used instead of building new tracks due to the land acquisition obstacle, as per a
meeting between Indonesian Vice President Jusuf Kalla and Indonesian Transportation Minister
Budi Karya Sumadi.
- The development of a new airport in Karawang, West Java, extending southeast of Jakarta, was
halted with no specific date of restart, as the provincial government decided to prioritise the
construction of Kertajati Airport in Majalengka (according to Agus Santoso, Director General of Air
Transportation).

5. 05
ASEAN Macroeconomic Trends:
Indonesia Ramping Up Infrastructure Development; Malaysia Maintaining Interest Rate
Thailand: Whether or Not Consumer Sentiment Will Improve Is Critical
Thailand’s August BCI improved slightly to 50.7 from 50.3 in the previous month, exceeding 50 for four
months straight and indicating a sound business environment. CCI also continued to increase to 74.5
in August.
However, consumer confidence has been levelling off over the long term, and the possibility of an
instant, significant recovery might be remote. Despite an upturn in business sentiment from the supply
side, whether or not the demand side will follow the lead with consumers becoming willing to spend
requires further attention.

6. 06
ASEAN Macroeconomic Trends:
Indonesia Ramping Up Infrastructure Development; Malaysia Maintaining Interest Rate
Malaysia: Maintaining Interest Rate Amidst Rapid Economic Growth
BNM held the MPC Meeting and decided to maintain the policy interest rate at the current level of
3.00%.
According to the Monetary Policy Statement, the current policy interest rate level is appropriate with
no need of change in light of the high GDP growth rate for 2Q (5.8% YoY) and stable commodity prices.
Furthermore, BNM predicts that the full-year GDP growth rate for 2017 will likely exceed the projection
of 4.8% YoY, driven by favourable exports.
On 6 September, Malaysia announced its July export value, which experienced striking growth by
30.9% YoY to reach MYR 78.6 billion. This is attributable to the recovery in crude oil prices, rising
exports for the country’s major export products of palm oil and natural gas, and a favourable trend for
semiconductor exports alongside the increasing demand for the global IT sector.

7. 07
ASEAN Macroeconomic Trends:
Indonesia Ramping Up Infrastructure Development; Malaysia Maintaining Interest Rate
The Philippines: Mainland China and Hong Kong Increasing Presences Amongst
All Export Destinations
The Philippines released its balance of trade for July with a deficit of USD 1.65 billion, which narrowed
from the USD 1.99 billion recorded in June.
Exports showed a substantial increase of 10.4% YoY to USD 5.28 billion; electronic devices, which
account for more than half of the country’s consumer product exports, expanded the most by 11.8%
YoY, driving the overall exports.
Exports to Japan, the country’s largest export destination, decreased by 6.1% YoY, but those to Hong
Kong and Mainland China reported remarkable growth by 32.5% and 18.2%, respectively. Over the
long term, it is increasingly likely that the two regions will take over and become the Philippines’ largest
trade partners.

8. 08
ASEAN Macroeconomic Trends:
Indonesia Ramping Up Infrastructure Development; Malaysia Maintaining Interest Rate

9. 09
ASEAN Macroeconomic Trends:
Indonesia Ramping Up Infrastructure Development; Malaysia Maintaining Interest Rate
The Central Bank of the Philippines (The Bangko Sentral ng Pilipinas, BSP) released the CCI for 3Q on
10 September, and the figure showed a slight decline compared to the previous quarter to 10.2 from
13.1. However, it should be noted that the statistical method the country adopts for the calculation of
CCI is different from other economies, under which the figure represents the value of the proportion
of respondents with an optimistic view subtracted by that of respondents with a pessimistic view.
Hence, this figure should be interpreted as an expectation index, and with this in the background, the
CCI denotes a continued, strong consumer sentiment in the country.
In addition, inflation increased by 3.1% YoY, retail price index (RPI) rose by 3.3% YoY, and wholesale
price index (WPI) fell by 1.0%, all indicating a stable trend.
Singapore: Manufacturing Sector Retaining a Favourable Trend
Singapore released the Manufacturing PMI for August, which edged up to 51.8 from 51.0 in the
previous month, and has remained favourable at above 50 for 12 months straight since September
2016. The August Nikkei PMI also improved to 53.2 from 51.3 in July, hitting a record high since May
2016, when it first exceeded 50. The country’s 2Q GDP growth rate shows that the manufacturing
sector expanded by 2.8% YoY. Overall, the two types of PMI both suggest the sector is buoyant at
present.
The unemployment rate for 2Q levelled off at 2.2% from the previous quarter, with no particular points
of concern.

10. 10
ASEAN Macroeconomic Trends:
Indonesia Ramping Up Infrastructure Development; Malaysia Maintaining Interest Rate
Summary and Key Focus in the Next Report
During 1–15 September, Malaysia released numerous critical indicators, including a sustained policy
interest rate at 3.00% and a striking increase of over 30% in exports compared to the previous year.
These figures suggest the country’s economic growth will remain favourable throughout 3Q.
Likewise, Singapore’s economic prospect is optimistic in light of the healthy indicators for the
manufacturing sector (Manufacturing PMI and Nikkei PMI), the key driver for the country’s economic
growth.
Thailand’s business and consumer sentiments are both on a gradual recovery, but the latter still has
room for further improvement. The country is expected to experience a continued yet slow recovery
until the end of 2017.
The next report will cover the period from 16–30 September and focus on the following indicators in
particular (dates in the brackets are scheduled release dates).
Indonesia:
The Board of Governor’s Meeting of Bank Indonesia (Regular; 22 September)

11. 11
ASEAN Macroeconomic Trends:
Indonesia Ramping Up Infrastructure Development; Malaysia Maintaining Interest Rate
Thailand:
Balance of Trade (August; 25 September), Automobile Sales (August; 25 September), Monetary Policy
Committee Meeting (Regular; 27 September), Retail Sales/Individual Consumption (August; 30
September)
Malaysia:
Coincident Index (July; 21 September), Leading Index (July; 21 September)
The Philippines:
Monetary Policy Meeting (Regular; 21 September)
Vietnam:
Inflation Rate (September; 26 September), Real GDP Growth Rate (3Q; 28 September), Balance of
Trade/Retail Sales/Industrial Production (September; 28 September)
Singapore:
Balance of Trade (August; 18 September), Inflation (August; 25 September), Industrial Production
(August; 26 September)

12. 12
ASEAN Macroeconomic Trends:
Indonesia Ramping Up Infrastructure Development; Malaysia Maintaining Interest Rate

13. 13
ASEAN Macroeconomic Trends:
Indonesia Ramping Up Infrastructure Development; Malaysia Maintaining Interest Rate
Tokyo
Uzabase, Inc.
Ebisu First Square. 10F 1-18-14 Ebisu, Shibuya-ku, Tokyo 150-0013, Japan
+81-3-4574-6552
+81-3-4574-6553
customer@uzabase.com
Singapore
20 Collyer Quay, #23-01, Singapore 049319
+65-6653-8314
customer@uzabase.com
Hong Kong
30/F Entertainment Building, 30 Queen's
Road Central, Central, Hong Kong
+852-5808-3148 +852-3103-1011
customer@uzabase.com
Sri Lanka
48/4/1, Parkway building, Park Street,
Colombo 2. Sri Lanka.
+94-114-232-622
customer@uzabase.com
Shanghai
606, No.1440 Yan’An Rd.(M), Shanghai,
China
+86-21-6103-1677
customer@uzabase.com
©2017 UZABASE, Inc.
About US