The World Bank sees Indonesia' economy will contraction in the range of 1.6 percent to 2.0 percent due to the pandemic from earlier stayed at zero percent in this year - Photo: Special

JAKARTA (TheInsiderStories) – Good Morning! World Bank’ chief economist Gita Gopinath will hold a presser on the latest world economic outlook for this year. Earlier, she rated the global economy will contraction 3 percent and Indonesia economy only grow 0.5 percent.

While, finance ministry Sri Mulyani Indrawati hand it over 2021 State Budget draft to parliament. Next year, the Southeast Asia largest economy targeting the economic growth around 4.5 to 5.5 percent from this year contraction 0.4 – 1.0 percent.

As for this year, Bank Indonesia estimates that Indonesia’ economic growth in the range of 0.9 percent to 1.9 percent, down from the previous projection at 2.3 percent. In 2021, the economic growth is expected to surge to around 5 – 6 percent due to low domestic inflationary pressure, easing external pressure, and the need to encourage further economic growth.

From global, India  plans to impose higher trade barriers and raise import duties on 300 products from China and other countries. This is as part of the country’ efforts to protect domestic business and with the statement of Prime Minister, Narendra Modi, who recently announced an independence campaign to promote local products.

Oil producers and its allies (OPEC+) again put pressure on countries that have not cut its productions like Iraq and Kazakhstan. The panel will meet again on July 15 to recommend the next level of production cuts to support the price of oil was hit by the COVID-19 pandemic.

Yesterday, Indonesian Rupiah strengthened 0.04 percent to 14,077 per US Dollar and the Jakarta Composite Index (JCI) fell 1.25 percent to 4,925.25 compared to the previous day. Today, the stock index is expected to move between 4,816 – 5,040 and the local currency between 14,040 to 14,110 versus the US Dollar.

Analysts said the central bank’ decision to cut Seven-Days Reverse Repo Rate by 25 basis points to 4.25 percent was inline with market expectations and could make the exchange rate strengthens today. However, they said the market was still wary of the second wave of COVID-19 virus which could reduce economic activity.

In addition, regional geopolitical tensions in Asia between North and South Korea also China and India could distract the strengthening of the Rupiah against the Greenback. However, observers see the reopening of the economy amid a pandemic giving positive sentiment to the market, including new normalcy in Indonesia.

If the new normal is successful in the sense of an active economy and a controlled pandemic, the local currency could strengthen to 13,500 against the American Dollar in the short term. But, other observers rated, cutting interest rates will provide negative sentiment for the Rupiah if it is not in line with a decrease in lending rates.

Stocks to be watch for today are PT Bank Negara Indonesia Tbk (IDX: BBNI), PT Bank Mandiri Tbk (IDX: BMRI), PT Bumi Serpong Damai Tbk (IDX: BSDE), PT Indocement Tunggal Perkasa Tbk (IDX: INTP), PT Medco Energy Tbk (IDX: MEDC), PT AKR Corporindo Tbk (IDX: AKRA), PT Bank Tabungan Negara Tbk (IDX: BBTN), PT Bukit Asam Tbk (IDX: PTBA), PT Aneka Tambang Tbk (IDX: ANTM), PT Alam Sutera Realty Tbk (IDX: ASRI), and PT Mitra Adi Perkasa Tbk (IDX: MAPI).

May you have a profitable day!

Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia