Indonesia

SEB MERCHANT BANKING – COUNTRY RISK ANALYSIS August 29, 2008

Analyst: Rolf Danielsen. Tel : +46 8 763 83 92. E-mail : rolf.danielsen@seb.se

The economy has surprised on the upside with growth exceeding 6% pa. so far in 2008, but rising
inflation and fear of overheating have prompted the central bank to hike interest rates. Foreign
investors have welcomed recent reforms to fight corruption and improve the business climate.

Country Risk Analysis

píêçåÖ=Éñéçêíë=~åÇ=ÇçãÉëíáÅ=ÇÉã~åÇ=Äìçó=íÜÉ=ÉÅçåçãó=íç=íÜÉ=éçáåí=çÑ=çîÉêJ
ëíêÉíÅÜK==cçääçïáåÖ=~ÅÅÉäÉê~íáåÖ=~Åíáîáíó=áå=OMMT=~ë=ÖêçïíÜ=éáÅâÉÇ=ìé=íç=SIPB=Ñêçã=
RIRB=íÜÉ=éêÉÅÉÇáåÖ=óÉ~êI=ÉÅçåçãáÅ=Éñé~åëáçå=ÅçåíáåìÉÇ=~í=~=Äêáëâ=Åäáé=áåíç=íÜÉ=Ñáêëí=
Ü~äÑ=çÑ=OMMUK==bñéçêíë=~ÅÅÉäÉê~íÉÇ=~åÇ=ÅçãÄáåÉÇ=ïáíÜ=ëíêçåÖ=ÇçãÉëíáÅ=ÇÉã~åÇ=Ñçê=
ÄçíÜ=Åçåëìãéíáçå=~åÇ=áåîÉëíãÉåí=ÖççÇëK==qÜ~í=ï~ë=áå=êÉëéçåëÉ=íç=ãçåÉí~êó=éçäáÅó=
É~ëáåÖK==få=OMMTI=íÜÉ=ÅÉåíê~ä=Ä~åâ=ÄÉäáÉîÉÇ=áí=Ü~Ç=Ö~áåÉÇ=Åçåíêçä=çîÉê=éêáÅÉ=
ÇÉîÉäçéãÉåíë=ëÉÉáåÖ=ÜÉ~ÇäáåÉ=áåÑä~íáçå=Ñ~ääáåÖ=Ä~Åâ=íç=íÜÉ=í~êÖÉí=äÉîÉä=ÄÉíïÉÉå=RJTBK===
qÜ~í=É~ëáåÖ=Ü~Ç=ÑçääçïÉÇ=~=éÉêáçÇ=çÑ=ãçåÉí~êó=íáÖÜíÉåáåÖ=áå=êÉëéçåëÉ=íç=áåÅêÉ~ëÉÇ=
îçä~íáäáíó=áå=ÑçêÉáÖå=ÉñÅÜ~åÖÉ=~åÇ=ãçåÉó=ã~êâÉíë=áå=OMMRI=ïÜáÅÜ=áå=íìêå=Ü~Ç=
ÅçáåÅáÇÉÇ=ïáíÜ=~=ëÜ~êé=êáëÉ=áå=áåÑä~íáçå=íêáÖÖÉêÉÇ=Äó=íÜÉ=ÜáâáåÖ=çÑ=ÇçãÉëíáÅ=ÑìÉä=
éêáÅÉëK==få=OMMSI=áåÑä~íáçå=ëìÄëáÇÉÇ=~åÇ=íÜÉ=ÅÉåíê~ä=Ä~åâ=îÉåíìêÉÇ=çå=~=Öê~Çì~ä=É~ëáåÖ=
ïáíÜ=íÜÉ=ä~ëí=Åìí=áå=áåíÉêÉëí=ê~íÉë=çÅÅìêêáåÖ=áå=aÉÅÉãÄÉê=OMMTK===
=
Bank credits to private sector
kÉï=Äçìí=çÑ=áåÑä~íáçå=~åÇ=ÅêÉÇáí=
Policy Interest rates (1M)
Éñé~åëáçå=éêçãéí=ãçåÉí~êó=íáÖÜíÉåáåÖK==
35
táíÜ=íÜÉ=ÄÉåÉÑáí=çÑ=ÜáåÇëáÖÜí=íÜÉ=ãçåÉí~êó=
É~ëáåÖ=çÑ=OMMS=~åÇ=OMMT=ã~ó=åçï=~ééÉ~ê= 30
% growth pa.

Credit growth
éêÉã~íìêÉ=~åÇ=ãçêÉ=ëç=~ë=áí=ÅçãÄáåÉÇ= 25
ïáíÜ=áåÅçãéäÉíÉ=ëíÉêáäáò~íáçå=çÑ=íÜÉ=Ä~ä~åÅÉ= 20
çÑ=é~óãÉåí=ëìêéäìëK==páåÅÉ=ä~íÉ=OMMSI=Ä~åâë= 15
Ü~Ç=êÉîáîÉÇ=íÜÉáê=äÉåÇáåÖ=~Åíáîáíó=~åÇ= Interest rate
10
íçï~êÇ=íÜÉ=ÉåÇ=çÑ=OMMT=ÅêÉÇáí=Éñé~åëáçå=
Ü~Ç=êÉ~ÅÜÉÇ=OTB=óçó=EóÉ~êJçåJóÉ~êFK==^ë= 5
2005 2006 2007 2008
ÅêÉÇáí=Éñé~åëáçå=~ÅÅÉäÉê~íÉÇ=áåíç=íÜÉ=Ñáêëí=
èì~êíÉê=çÑ=OMMU=~åÇ=éêáÅÉ=éêÉëëìêÉ=
Source: Reuters EcoWin

ãçìåíÉÇI=íÜÉ=ÅÉåíê~ä=Ä~åâ=ÅÜ~åÖÉÇ=í~Åâ=~åÇ=Ñáå~ääó=áåÇáÅ~íÉÇ=íáÖÜíÉê=ãçåÉí~êó=
ÅçåÇáíáçåë=Äó=~=MIORB=áåíÉêÉëí=ê~íÉ=ÜáâÉ=áå=j~óK==aìêáåÖ=íÜÉ=Ñáêëí=èì~êíÉê=çÑ=OMMUI=íÜÉ=
`mf=áåÅêÉ~ëÉÇ=íç=UB=óçóI=~åÇ=~ÅÅÉäÉê~íÉÇ=íç=~äãçëí=NOB=óçó=áå=gìäóK==cçê=ëìêÉI=íÜ~í=
êÉÑäÉÅíÉÇ=åçí=çåäó=ëâóêçÅâÉíáåÖ=ÅêÉÇáí=ÖêçïíÜ=~åÇ=ÜáÖÜ=Å~é~Åáíó=ìíáäáò~íáçå=áå=
áåÇìëíêó=Äìí=~äëç=íÜÉ=áãé~Åí=çÑ=êáëáåÖ=ÖäçÄ~ä=ÅçããçÇáíó=éêáÅÉëK==
=
_ìí=ÜáÖÜÉê=ê~íÉë=ã~ó=Ü~îÉ=ëí~êíÉÇ=íç=ÄáíÉ=~åÇ=ÅçããçÇáíó=éêáÅÉë=ëÜçìäÇ=Ü~îÉ=
éÉ~âÉÇK==qÜêÉÉ=ëìÄëÉèìÉåí=ê~íÉ=ÜáâÉë=Ü~îÉ=ê~áëÉÇ=éçäáÅó=ê~íÉë=Äó=N=éÉêÅÉåí~ÖÉ=éçáåí=
EééF=~åÇ=ÅêÉÇáí=áåÇáÅ~íçêë=ëìÖÖÉëí=íÜ~í=íáÖÜíÉê=ãçåÉí~êó=ÅçåÇáíáçåë=~êÉ=ÄÉÖáååáåÖ=íç=
ÄáíÉK==få=gìäóI=ÅêÉÇáí=Éñé~åëáçå=ëäçïÉÇ=íç=POB=óçó=Ñêçã=PQB=áå=gìåÉK=qÜçëÉ=~êÉ=ëíáää=

important your attention is drawn to the statement on the back cover of this report which affects your rights.
SEB Merchant Banking Country Risk Analysis August 29, 2008

ÜáÖÜ=Äìí=äçïÉê=íÜ~å=~í=íÜÉ=ÄÉÖáååáåÖ=çÑ=íÜÉ=óÉ~ê=áå=êÉ~ä=íÉêãëK==fåÑä~íáçåI=ÜçïÉîÉêI=
ã~ó=ëíáää=ÅäáãÄK==cçê=~=äçåÖ=íáãÉ=ëìÄëáÇáÉë=ëìééêÉëëÉÇ=ãìÅÜ=çÑ=íÜÉ=áåÑäìÉåÅÉ=Ñêçã=
ÜáÖÜÉê=ÉåÉêÖó=éêáÅÉëI=Äìí=áå=j~ó=íÜÉ=ÖçîÉêåãÉåí=ï~ë=ÑçêÅÉÇ=íç=ê~áëÉ=ÇçãÉëíáÅ=ÑìÉä=
éêáÅÉë=Äó=OVBK==qÜ~í=Ü~ë=óÉí=íç=ëÉÉ=áíë=Ñìää=é~ëëJíÜêçìÖÜ=áåíç=ÜÉ~ÇäáåÉ=áåÑä~íáçåK==
bñéÉÅí~íáçåë=~êÉ=åçï=Ñçê=`mf=áåÑä~íáçå=íç=éÉ~â=~í=NPB=Äó=óÉ~êJÉåÇI=ÄÉÑçêÉ=ëäçïáåÖ=íç=
ëáåÖäÉ=ÇáÖáíë=íÉêêáíçêó=áå=ä~íÉ=OMMV=Ñ~ÅíçêáåÖ=áå=åçí=çåäó=íÜÉ=ÅççäáåÖ=çÑ=ÇçãÉëíáÅ=
~ÅíáîáíáÉë=Äìí=~äëç=ëçÑíÉê=áåíÉêå~íáçå~ä=éêáÅÉë=çÑ=ê~ï=ã~íÉêá~äëI=ÑççÇ=ëíìÑÑ=~åÇ=çáäK===
=
cáëÅ~ä=éçäáÅó=ÅçåíáåìÉë=çîÉê~ää=ëíÉ~ÇóK=tÜáäÉ=êÉÅÉåí=óÉ~êëÛ=ãçåÉí~êó=éçäáÅáÉë=ã~ó=ÄÉ=
ÇÉÉãÉÇ=íçç=ä~ñ=~åÇ=íÜÉ=ÅÉåíê~ä=Ä~åâ=êÉ~ÅíáîÉ=ê~íÜÉê=íÜ~å=éêç~ÅíáîÉI=ÑáëÅ~ä=éçäáÅáÉë=
Ü~îÉ=êÉã~áåÉÇ=çîÉê~ää=ëíÉ~Çó=ÇÉëéáíÉ=ëçãÉ=ïÉ~âÉåáåÖK==få=OMMTI=íÜÉ=ÑáëÅ~ä=Ä~ä~åÅÉ=
ÉåÇÉÇ=áå=~=ÇÉÑáÅáí=çÑ=NIOB=çÑ=damK=qÜ~í=ï~ë=MIV=éé=ÜáÖÜÉê=íÜ~å=áå=OMMR=~åÇ=
ÉñéÉÅí~íáçåë=~êÉ=Ñçê=~=ÑìêíÜÉê=êáëÉ=çÑ=MIRéé=íÜáë=óÉ~êK=eáÖÜÉê=ÑìÉä=ëìÄëáÇáÉë=Éñéä~áå=~=
é~êí=çÑ=íÜáë=ïÉ~âÉåáåÖ=~ë=ÇçãÉëíáÅ=éêáÅÉë=Ü~îÉ=êÉã~áåÉÇ=ÅäÉ~êäó=ÄÉäçï=áåíÉêå~íáçå~ä=
ã~êâÉí=éêáÅÉëK==qÜ~í=áë=ëíáää=íÜÉ=Å~ëÉ=ÉîÉå=~ÑíÉê=~=ÜÉÑíó=éêáÅÉ=~ÇàìëíãÉåíë=áå=ä~ëí=j~óK==
eçïÉîÉêI=éêçîáÇÉÇ=çáä=éêáÅÉë=Ü~îÉ=é~ëëÉÇ=íÜÉ=ÅóÅäáÅ~ä=éÉ~â=íÜáë=íáãÉ=~êçìåÇI=ëÜ~êé=
ïÉ~âÉåáåÖ=çÑ=íÜÉ=ÑáëÅ~ä=áë=äáâÉäó=íç=ÄÉ=~îçáÇÉÇ=áå=OMMVI=~åÇ=ãçëí=çÄëÉêîÉêë=ÑçêÉëÉÉ=íÜÉ=
ÇÉÑáÅáí=ÄÉáåÖ=Åçåí~áåÉÇ=ïáíÜáå=OB=çÑ=damI=ÉåëìêáåÖ=íÜÉ=ÅçåíáåìÉÇ=êÉÇìÅíáçå=çÑ=
ÖçîÉêåãÉåí=ÇÉÄíLdam=ê~íáç=íç=PPB=~í=ÉåÇ=OMMVK====
=
bñíÉêå~ä=Ä~ä~åÅÉ=êÉã~áåë=ÜÉ~äíÜóK== Foreign trade
mÉêáçÇë=çÑ=É~ëó=ãçåÉóI= 13 ,0

Current account balance ($ bill.)

12 ,5 Exports 1,2
åçíïáíÜëí~åÇáåÖI=íÜÉ=Ä~ä~åÅÉ=çÑ=
Exports, Imports ($ bill.)

12 ,0
é~óãÉåíë=êÉã~áåÉÇ=ëíêçåÖ=áå=OMMTI= 11 ,5 CA balance
1,1

~åÇ=OMMU=áë=äáâÉäó=íç=ëÉÉ=çåäó=~= 11 ,0
1,0
10 ,5
ãçÇÉê~íÉ=ïÉ~âÉåáåÖ=ÇìÉ=íç=ÇÉÅäáåáåÖ=
10 ,0
åÉí=Å~éáí~ä=áåÑäçïëK==få=OMMTI=êáëáåÖ=çáä= 9 ,5
0,9

éêáÅÉë=~åÇ=ëíêçåÖ=ÖêçïíÜ=áå=Éñéçêíë= 9 ,0 0,8
ã~êâÉíë=ëìééçêíÉÇ=~=ëíÉ~Çó=ëìêéäìë=çÑ= 8 ,5
8 ,0 0,7
íÜÉ=ÅìêêÉåí=~ÅÅçìåí=Ä~ä~åÅÉ=~í=ANM=ÄáääK= jan apr jul okt jan apr
2007 2008
JJ~Äçìí=íç=OB=çÑ=damK==píêçåÖ=Å~éáí~ä= Source: R eut ers EcoW in

áåÑäçïë=íç=íÜÉ=äçÅ~ä=ëíçÅâ=~åÇ=ÄçåÇ=ã~êâÉíë=~åÇ=Ñêçã=ÑçêÉáÖå=ÇáêÉÅí=áåîÉëíçêë=
ÅçãéÉåë~íÉÇ=ANS=ÄáääK=çÑ=äçåÖ=íÉêã=äç~åë=Ñ~ääáåÖ=ÇìÉK==qÜ~í=~ääçïÉÇ=íÜÉ=ÅÉåíê~ä=Ä~åâ=
íç=~ÇÇ=ANM=ÄáääK=íç=áíë=êÉëÉêîÉëI=ê~áëáåÖ=íÜÉáê=äÉîÉä=íç=íÜÉ=Éèìáî~äÉåí=çÑ=S=ãçåíÜë=çÑ=
áãéçêíëK==få=OMMUI=íÜÉëÉ=íêÉåÇë=ÅçåíáåìÉÇK==bñéçêíë=éÉêÑçêãÉÇ=ïÉää=~ë=ÜáÖÜÉê=çáä=
éêáÅÉë=ÅçãéÉåë~íÉÇ=êÉÇìÅíáçå=çÑ=çáä=Éñéçêí=îçäìãÉë=Å~ìëÉÇ=Äó=íÜÉ=å~íìê~ä=ÇÉéäÉíáçå=
çÑ=ã~íìêáåÖ=çáä=ÑáÉäÇëK==`çåíáåìÉÇ=ëíêçåÖ=ÇÉã~åÇ=Ñêçã=^ëá~å=íê~ÇáåÖ=é~êíåÉêëI=
áåÅäìÇáåÖ=fåÇá~=~åÇ=`Üáå~I=~äëç=ÜÉäéÉÇ=ëìëí~áå=åçåJçáä=Éñéçêíë=áå=Ñ~ÅÉ=çÑ=ïÉ~âÉê=rp=
ÇÉã~åÇK==lå=íÜÉ=áãéçêí=ëáÇÉI=Äìçó~åÅó=ï~ë=åç=äÉëë=áãéêÉëëáîÉI=äÉ~îáåÖ=íÜÉ=íê~ÇÉ=
ëìêéäìë=~Äçìí=ìåÅÜ~åÖÉÇ=áå=íÜÉ=Ñáêëí=Ü~äÑ=çÑ=íÜÉ=óÉ~êI=~åÇ=íÜÉ=ÅìêêÉåí=~ÅÅçìåí=ëìêéäìë=
éÉêÜ~éë=ëäáÖÜíäó=ìé=~ë=ëìééçêíÉÇ=Äó=~=ãçêÉ=Ñ~îçê~ÄäÉ=ëÉêîáÅÉë=~åÇ=áåÅçãÉ=Ä~ä~åÅÉ=
~åÇ=ëíêçåÖ=ÖêçïíÜ=çÑ=ïçêâÉêë=êÉãáíí~åÅÉë=Ñêçã=~Äêç~ÇK==cçê=íÜÉ=êÉã~áåÇÉê=çÑ=OMMUI=
ÉñíÉêå~ä=íê~ÇÉ=Ñäçïë=~êÉ=ëÉí=íç=ïÉ~âÉå=áå=ÄçíÜ=ÇáêÉÅíáçåë=ÉñÅÉéí=çáä=Éñéçêíë=~ë=
ëÜáéãÉåíë=áåÅêÉ~ëÉ=Ñêçã=íÜÉ=åÉï=`Ééì=ÑáÉäÇK==^ë=~=êÉëìäí=íÜÉ=ÅìêêÉåí=~ÅÅçìåí=ëÜçìäÇ=
ëÉÉ=~=ëã~ää=áãéêçîÉãÉåí=íç=ANP=ÄáääI=Éèìáî~äÉåí=íç=OISB=çÑ=damK=qÜÉ=Ä~ä~åÅÉ=çÑ=
é~óãÉåí=ëìêéäìëI=Äó=Åçåíê~ëíI=ÅçìäÇ=ëÜêáåâ=ëäáÖÜíäó=íç=AT=Äáää=ÇìÉ=íç=ëÜ~êéäó=êÉÇìÅÉÇ=
åÉí=éçêíÑçäáç=áåÑäçïë=íç=~=ëíçÅâ=ã~êâÉí=íÜ~í=ëç=Ñ~ê=áå=OMMU=Ü~ë=éÉêÑçêãÉÇ=~äãçëí=~ë=
éççêäó=~ë=íÜÉ=~îÉê~ÖÉ=çÑ=~ää=ÉãÉêÖáåÖ=ã~êâÉíëK==^ë=~=êÉëìäí=çÑ=ê~éáÇ=êÉé~óãÉåíëI=
ÑçêÉáÖå=ÇÉÄí=EUPB=äçåÖ=íÉêãF=ëÜçìäÇ=Ñ~ää=íç=OSB=çÑ=damK===
=
qÜÉ=ÖçîÉêåãÉåí=êÉâáåÇäÉë=íÜÉ=êÉÑçêã=éêçÅÉëëK==páåÅÉ=äçåÖI=áåîÉëíçêë=Ü~îÉ=ëÜáÉÇ=
fåÇçåÉëá~=ÇÉëéáíÉ=áãéêçîÉÇ=ÖêçïíÜK==qÜ~í=áë=ÄÉÅ~ìëÉ=çÑ=áíë=êÉéìí~íáçå=~ë=~=ÇáÑÑáÅìäí=
éä~ÅÉ=Ñçê=ÄìëáåÉëëI=Äìí=íÜ~í=ã~ó=åçï=ÄÉ=~Äçìí=íç=ÅÜ~åÖÉK=få=OMMTI=íÜÉ=ÖçîÉêåãÉåí=

2
SEB Merchant Banking Country Risk Analysis August 29, 2008

áåíêçÇìÅÉÇ=~=ëäÉï=çÑ=ÄìëáåÉëë=ÑêáÉåÇäó=äÉÖáëä~íáçåI=áåÅäìÇáåÖ=~=åÉï=áåîÉëíãÉåí=ä~ï=
íÜ~í=ëÜçìäÇ=éêçîáÇÉ=ÖêÉ~íÉê=Åä~êáíó=~åÇ=Éèì~äáòÉÇ=íêÉ~íãÉåí=Ñçê=ÇçãÉëíáÅ=~åÇ=ÑçêÉáÖå=
áåîÉëíçêëK==qÜáë=ëÜçìäÇ=~ääÉîá~íÉ=ÅçåÅÉêåë=êÉÖ~êÇáåÖ=~ÇÇÉÇ=êÉÇ=í~éÉ=~åÇ=ìåÅÉêí~áåíó=
ÇìÉ=íç=äçÅ~ä=äÉîÉä=ÄìêÉ~ìÅê~Åó=áå=íÜÉ=áåîÉëíãÉåí=éêçÅÉëë=ÉîÉå=íÜçìÖÜ=ëçãÉ=çÄëí~ÅäÉë=
ïáää=êÉã~áå=áåÅäìÇáåÖ=çåÉêçìë=ä~Äçê=ä~ïë=~åÇ=ÜáÖÜ=ãáåáãìã=ï~ÖÉëK==jçêÉçîÉêI=åÉï=
í~ñ=ä~ïë=ëÜçìäÇ=ÜÉäé=êÉÇìÅÉ=Åçêêìéíáçå=Äó=ÅìêÄáåÖ=íÜÉ=éçïÉê=çÑ=í~ñ=çÑÑáÅá~äë=~í=
î~êáçìë=~Çãáåáëíê~íáîÉ=äÉîÉäëK==få=OMMT=íÜÉ=ÖçîÉêåãÉåí=~äëç=áåíÉåëáÑáÉÇ=áíë=ÑáÖÜí=
~Ö~áåëí=Åçêêìéíáçå=Äó=êÉãçîáåÖ=íïç=ãáåáëíÉêë=áãéäáÅ~íÉÇ=áå=~áÇáåÖ=ÑìåÇ=íê~åëÑÉêë=Ñçê=
íÜÉ=óçìåÖÉëí=ëçå=çÑ=íÜÉ=ä~íÉ=jêK=pìÜ~êíçK=qÜ~í=ã~êâÉÇ=íÜÉ=ÖçîÉêåãÉåíÛë=Ñáêëí=ã~àçê=
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=
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ÅçåëçäáÇ~íÉÇ=Üáë=éçïÉê=~åÇ=íÜÉ=áåÅìãÄÉåí=áë=ÉñéÉÅíÉÇ=íç=ïáå=åÉï=ÉäÉÅíáçåë=ÇìÉ=áå=
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ëìÅÜ=Ü~ë=ÄÉÉå=~ÄäÉ=íç=áåíÉêå~äáòÉ=éçäáíáÅ~ä=éêçÄäÉãë=ÅçåÑäáÅíë=áåÅäìÇáåÖ=ïáíÜ=íÜÉ=
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How to read the chart?
Key ratios 2008 Moving out from the center Resilience
12
reduces risk.
Population (mill.) 234 10

GDP/capita ($) 2240 6

Macro balance 4
Liquidity
GDP (change) 6% 2

Inflation 11%
Curr.Acc. Balance/GDP 3%
Reserves/imports (months) 6 Absence of event
Information
risk
Budget balance/GDP -1% Indonesia Average EM
Government debt/GDP 35% Philippines

bñíÉêå~ä=ê~íáåÖëW= mÉÉêëW Graph: The pentagon shows the creditworthiness profile of

cáíÅÜW=__== râê~áå~ Indonesia similar to that of the Philippines, although
pCmW==__J= mÜáäáééáåÉë= weaker on most accounts. That includes resilience,
sáÉíå~ã= reflecting issues such as governance and corruption. The
macro balances is a relative strength.
=
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SEB Merchant Banking Country Risk Analysis August 29, 2008

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Key data: 2003 2004 2005 2006 2007 2008 2009 2010
GDP (mill.US$) 235 017 256 712 285 436 364 396 433 201 525 124 595 152 658 423
GDP/capita (US$) 1067 1150 1263 1592 1870 2240 2508 2742
GDP (change) 4,8% 5,0% 5,7% 5,5% 6,3% 5,7% 4,8% 5,6%
Investments/GDP 20% 21% 22% 22% 22% 24% 25% 24%
Budget balance/GDP -2% -1% -1% -1% -1,2% -1,3% -1% -1%
Govt debt/GDP 57% 47% 39% 37% 35% 33% 31%
CPI inflation (%) 6,8% 6,1% 10,5% 13,1% 6,4% 10,9% 10,1% 6,6%
Money demand (%) 6% 7% 12% 15% 16% 13% 8% 9%
Stock prices (%change) 13% 56% 37% 31% 53%
Interest rates 9,5% 7,4% 9,6% 11,6% 8,4% 8,6% 8,8% 8,1%
Exch. Rate ($) 8574 8940 9710 9167 9133 9217 9289 9399
Trade/GDP (%) 44% 47% 55% 49% 47% 50% 47% 45%
Oil price (Brent) $29 $38 $54 $65 $73 $117 $113 $101
Millions US $
Export of goods 64 108 70 766 86 995 103 528 118 014 149 012 156 938 165 304
Imports of goods 39 546 50 615 69 463 73 867 85 295 116 080 123 104 129 298
Other: -16 457 -18 588 -17 255 -18 826 -22 354 -19 487 -19 228 -18 929
Current account ($ mill) 8 105 1 563 277 10 835 10 365 13 445 14 606 17 077
(% of GDP) 3,4% 0,6% 0,1% 3,0% 2,4% 2,6% 2,5% 2,6%
FDI -597 -1 512 5 272 2 210 2 138 3 272 3 983 4 222
Loan repayments -14 263 -15 604 -12 407 -16 280 -16 427 -16 093 -16 244 -13 877
Net other capital flows 11 031 17 363 4 958 9 549 14 061 6 900 1 931 -2 345
Balance of payments 4 276 1 810 -1 900 6 313 10 138 7 524 4 276 5 077
Reserves 32 714 34 524 32 624 38 938 49 075 56 600 60 876 65 953
Total debt 135 224 138 372 133 969 130 863 134 833 137 470 138 320 139 259
o/w short term debt 22 866 23 901 27 688 31 725 24 846 25 046 25 247 19 093
Source: OEF (Oxford Economic Forecasting) and SEB estimates.

Rating history
Fitch (eoy) B- B B+ B+ BB-
Moody's (eoy) B3 B3 B2 B2 B2+
S&P (eoy) CCC CCC B- B+ BB-
Type of government: Parliamentary Democracy
Next elections 2009
Other:
Latest PC deal 2005
Latest IMF arrangements 2003 SBA
In te rn a tio n a l re s e rv e s B a n k c r e d its to p r iv a te s e c to r
70 1 ,2
1 ,1
60
1 ,0
50 0 ,9
IDR (10**(15))
USD (billions)

0 ,8
40 0 ,7
0 ,6
30
0 ,5
20 0 ,4
0 ,3
10
0 ,2
A s ia n c r is is
0 0 ,1
2005 2006 2007 2008 1994 1996 1998 2000 2002 2004 2006 2008
S o u rc e : R e u te rs E c o W in S o u rc e : R e u te rs E c o W in

R isk P rem ium (spread) J a k a rta S to c k E x c h a n g e

600 Average 2750
2500
500 2250
Lost advantage since m arket turbu
2000
Basis Points

400 1750
Index

1500
300 1250
1000
200 Indonesia
750
500
100
04 05 06 07 08 250
97 98 99 00 01 02 03 04 05 06 07 08
E M B I P lus, C om pos ite E M B I Glo bal, Ind ones ia
So u rce: R e uters E co W in S o u rce : R e ute rs E co W in

4
SEB Merchant Banking Country Risk Analysis August 29, 2008

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