Economic Outlook: Uncertainty in Global Market

June 6, 2012 CIMB Niaga Treasury - Research & Strategy

Utang dan Defisit Dunia

Utang meningkat dengan pesat

yang diakibatkan oleh:

1. Stimulus fiskal

2. Program Bailout Perbankan

3. Over Spending

Country Debt (USD Bio) S&P Debt-to-GDP 2011

United States 15,071 AA+u 100

Japan 14,276 AA-u 233

Germany 2,777 AAAu 82

France 2,260 AA+u 87

United Kingdom 1,951 AAAu 81

Italy 2,518 BBB+u 121

Spain 960 A 70

Netherlands 521 AAAu 66

Greece 479 CC 166

Portugal 238 BB 106

Ireland 225 BBB+ 109

Belgium 463 AAu 95

Austria 285 AA+ 72

Australia 351 AAAu 23

IMF - Sep 2011

Utang dan Defisit Dunia

IMF WEO Apr 2012

Governments try to

reduce deficits and

debts

Utang dan Defisit Dunia

IMF WEO Apr 2012

Households try to

reduce debts and

increase saving

Euro Exposures

IMF WEO Apr 2012

1. Asia Pacific exposures to Euro relatively small

2. Euro exposures to Asia Pacific relatively small

Utang dan Defisit DuniaLangkah-langkah

penyelamatan Eropa dari

defisit, utang dan

ancaman kebangkrutan

1. Penghematan

Anggaran

2. European Financial

Stability Fund

3. Banks recapitalization

4. Debt Swap

5. Pembelian surat utang

Eropa oleh ECB

6. Pinjaman lunak ECB

terhadap bank Eropa

Country Deficit 2010 Deficit 2011 Deficit 2012

United States -10.33 -9.64 -7.92

Japan -8.08 -8.88 -9.14

Germany -3.30 -1.67 -1.10

France -7.08 -5.89 -4.62

United Kingdom -10.21 -8.47 -7.01

Italy -4.48 -4.04 -2.36

Spain -9.24 -6.14 -5.16

Netherlands -5.34 -3.85 -2.80

Greece -10.42 -7.98 -6.87

Portugal -9.14 -5.87 -4.49

Ireland -31.98 -10.32 -8.59

Belgium -4.08 -3.54 -3.35

Austria -4.62 -3.47 -3.21Australia -4.95 -3.86 -1.86

IMF - Sep 2011

Mesin Ekonomi Yang Melambat

35

40

45

50

55

60

65

-4

-2

0

2

4

6

8

10

Inflasi dan Aktivitas Ekonomi Cina

CPI YoY

1Y Best Lending Rates

PMI Manufacturing Index - rhs Bloomberg

-1.1

0.0

1.1

2.2

3.3

9.0

9.5

10.0

10.5

11.0

Apr-09 Mar-10 Feb-11 Jan-12

Euro Zone Unemployment & Inflation

Unemployment Rate Inflation Y/Y - rhs

Bloomberg

Bangkitnya Raksasa Ekonomi Dunia

3

5

7

9

11

-1000

-800

-600

-400

-200

0

200

400

600

US Labor Market

Non Farm Payrolls Unemployment Rate - rhs

Bloomberg

X 1000 %

Pasar Tenaga Kerja

Amerika Mulai pulih:

1. 3.7 juta orang telah

kembali bekerja sejak

2010

2. Tingkat pengangguran

turun ke 8.1% dari

10.0%

3. Masih ada 5 juta orang

yang menganggur

Kebijakan Moneter Yang Ekspansif

Suku Bunga Pertumbuhan Ekonomi

Resiko Likuiditas/ Fluktuasi

Bank Sentral Suku Bunga 2012 PolicyFederal Reserve 0.25% Suku Bunga 0.25% sampai 2014

Ada Kemungkinan QE 3ECB 1.00% Ada kemungkinan turun suku bunga 25 - 50 bps

LTRO EUR 1 TrilyunBank of Japan 0.10% QE Naik JPY 10 Trilyun dan Ada Kemungkinan Tambah

Inflation Target 1%Bank of England 0.50% QE Naik GBP 50 Billion

Kebijakan Moneter Yang Ekspansif

IMF WEO Apr 2012

Kebijakan Moneter Yang Ekspansif

IMF WEO Apr 2012

Interest Rates in

Long Term:

1. UK and US are

rising

2. Euro is

decreasing

Suku Bunga Pasar

0.25

0.75

1.25

1.75

2.25

Apr-11 Jul-11 Oct-11 Jan-12 Apr-12

3-Month Offering Rates (15 Apr '11 = 1)

AUD USD GBP IDR EUR

%

Bloomberg

0.3

0.6

0.9

1.2

1.5

1.8

Apr-11 Jul-11 Oct-11 Jan-12 Apr-12

10Y Bond Yield (15 Apr '11 = 1)

Indonesia US Germany Portugal Spain

Bloomberg

%

Suku Bunga Pasar

-3

-2

-1

0

1

2

3

4

5

6

7

8

Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11

Inflation

UK US Australia Indonesia

% YoY

Bloomberg

1. Pertumbuhan Ekonomi

Kuat Biasanya Disertai

Inflasi Tinggi

2. Inflasi Yang Tinggi Dapat

Disebabkan Oleh Kebijakan

Moneter Longgar

3. Inflasi Tinggi Biasanya

Disertai Mata Uang Lemah

Market and Inflation Rates

3M 2Y 10Y CPI YOYUSD 0.466 0.254 1.870 2.70CAD 1.347 1.273 2.020 1.90BRL 8.382 8.466 10.030 5.24

EUR 0.618 0.101 1.605 2.70GBP 1.011 0.415 2.005 3.50RUB 6.850 6.764 8.270 3.60CHF 0.112 -0.035 0.671 -1.00

JPY 0.196 0.110 0.867 0.50CNY 4.200 2.930 3.590 3.60KRW 3.540 3.380 3.750 2.50AUD 4.216 2.746 3.412 1.60NZD 2.873 NA 3.724 1.60INR 9.410 NA 8.664 8.65IDR 4.227 4.645 6.078 4.50SGD 0.382 0.200 1.510 5.20MYR 3.165 3.097 3.575 2.10PHP 3.192 3.310 5.846 3.00

As of 8 May 2012

Current Rates

1. Negative interest

rate is not always

bad for currency

2. Falling interest rate

causes currencies to

weaken

3. Safe heaven

currencies strong

when risks high

Pasar Komoditas

92

97

102

107

112

1,525

1,575

1,625

1,675

1,725

1,775

1,825

29-Nov 20-Dec 10-Jan 31-Jan 21-Feb

Hot Commodity

Gold Crude Oil (NYMEX) - rhs

$/ Troy Ounce

$/ Barrel

Bloomberg

1. Uneven Global

Economic Growth

2. Low inflation

3. Expansionary

monetary policy

Pasar Saham

0.00

1.00

2.00

3.00

4.00

5.00

Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12

Equity Indices Performance

IHSG Dow Jones Shanghai Straits Times

(Jan 2005 = 1)

Bloomberg

1. Pertumbuhan

Ekonomi Dunia

Tidak Merata

2. Inflasi rendah

3. Kebijakan

Moneter Longgar

4. Harga Komoditas

Stabil

Pasar Saham

1. Saham Kuat Jika

Pertumbuhan

Ekonomi Kuat

2. Saham Kuat Jika

Volatilitas Rendah

3. Volatilitas Rendah

Jika Resiko Pasar

Rendah 5

13

21

29

37

45

10,500

11,100

11,700

12,300

12,900

13,500

Apr-11 Jul-11 Oct-11 Jan-12 Apr-12

Stock Market & Volatility

Dow Jones IA Stock VIX - rhs

Bloomberg

Currency Ranking

-10

-8

-6

-4

-2

0

2

4

CAD BRL EUR GBP RUB CHF JPY CNY KRWAUD NZD INR IDR SGD MYR PHP

Currency Performance against USD

1 Month 3 Month 6 Month

Bloomberg (8 May 12)

Currency MatrixEconomic Growth Monetary Policy

Short Term Long Term STRONG MEDIUM WEAKUSD USDCAD CADBRL BRL

EUR EURGBP GBPRUB RUBCHF CHF

JPY JPYCNY CNYKRW KRWAUD AUDNZD NZDINR INRIDR IDRSGD SGDMYR MYRPHP PHP

Inflation 2012 Bias

20

Perekonomian Indonesia

Kenapa Harga BBM

Dapat Naik?

1. Harga minyak

dunia naik

2. Subsidi

membengkak

3. Indonesia Net

Impotir minyak

0

1

2

3

4

5

2001 2003 2005 2007 2009 2011

Indonesia Government Spending

Govt Expenditures Subsidies Oil Subsidies

(2001 = 1)

MoF Indonesia

Economic Challenges

Perekonomian Indonesia

Dampak Kenaikan

BBM & TDL:

1. Inflasi 6 – 7%

2. Defisit 2.2% PDB

3. BI Rate 5.75 – 6%

4. USD/IDR 9,100

5. 10Y Yield 6.5 - 7%

30,000

45,000

60,000

75,000

90,000

8,000

9,000

10,000

11,000

12,000

Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11

USD/IDR & Car Sales

USD/IDR Indonesia Car Sales - rhs

Bloomberg; Gaikindo

Economic Data and FX Correlation - IDR

8,000

8,900

9,800

10,700

11,600

12,500

-2

-1

0

1

2

3

4

5

Mar-09 Oct-09 May-10 Dec-10 Jul-11 Feb-12

USD/IDR & Overnight Rate Inflation Adjusted

Spread IDR O/N Depo & Inflation USD/IDR - rhs

%

Bloomberg

1. Bank Central dapat

menaikkan suku bunga dan/

atau mengendalikan

pertumbuhan kredit

2. Tambahan subsidi BBM dapat

mengendalikan inflasi tapi

berakibat anggaran defisit

3. Inflasi dampak negatif

temporary sedangkan defisit

dampak negatif long term

Ekspektasi Nilai Tukar 2012

CIMB KL Research

Main Issues

1. China and Europe economic growth slow

2. US economic growth accelerates

3. Inflation slows in the short term but accelerates in the long term

4. Expansionary monetary policies

5. Euro debt problem is a major threat for global economy

6. Asia Pacific growth in 2012 is quite strong but weaker than 2011

7. Stable commodity price

Economic Data and FX Correlation - USD

8,000

9,500

11,000

12,500

14,000

-800

-600

-400

-200

0

200

400

600

Apr-09 Nov-09 Jun-10 Jan-11 Aug-11 Mar-12

US Labor & Stock Performance

US Non-Farm Payrolls Dow Jones Industrial Avg - rhs

Bloomberg

x1000

-4

-3

-2

-1

0

1

2

3

69

72

75

78

81

84

87

90

Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11

US Inflation and USD FX Rate

USD Index USD 3M Libor Inflation Adj - rhs

%

Bloomberg

Economic Data and FX Correlation – Other Currency

0.9

1.0

1.1

1.2

1.3

-4

-3

-2

-1

0

1

2

3

Mar-09 Dec-09 Sep-10 Jun-11 Mar-12

3-Month Libor Inflation Adj & USD/CAD

CAD USD USD/CAD - rhs

Bloomberg

%

2.5

3.0

3.5

4.0

4.5

5.0

78

87

96

105

114

123

Australia Rate & Consumer Confidence

Westpac Consumer Confidence RBA Cash - rhs

%

Bloomberg

Economic Data and FX Correlation – Other Currency

1.43

1.48

1.53

1.58

1.63

1.68

-4.5

-3.7

-2.9

-2.1

-1.3

-0.5

Mar-10 Sep-10 Mar-11 Sep-11 Mar-12

GBP and USD 3 Month Libor Inflation Adjusted

GBP USD GBP/USD - rhs

Bloomberg

%

Economic Data and Commodity Correlation

200

250

300

350

400

48

50

52

54

56

58

Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12

China Manufacturing & Commodity Price

China PMI Manufacturing CRB Commodity Index - rhs

Bloomberg

43

63

83

103

123

300

400

500

600

700

Mar-09 Oct-09 May-10 Dec-10 Jul-11 Feb-12

US Jobless Claims & Price of Oil

Initial Jobless Claims Crude Oil NYMEX

x 1000 $/ barrel

Bloomberg

Analysis – CRB Commodity Index

1. Downtrend

2. Strong

support:

294.50

3. Resistance:

325.91

4. GDP Growth

and risk

aversion

driven

Analysis – Gold Spot

1. Ranging

2. Support:

1,560

3. Resistance:

1,790

4. Inflation

driven

Analysis – Crude Oil (Brent)

1. Ranging

2. Currently

decreasing

3. Support:

108.50

4. Resistance:

119.70

5. Growth

driven

33

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