Chinese economy grew 3.2 percent in the second quarter (2Q) of 2020 from a year earlier, the National Bureau of Statistics reported on Thursday (07/16) - Photo by the Government Official Website

JAKARTA (TheInsiderStories) — Good morning! As the Belt and Road Forum (BRF) closed, Chinese President Xi Jinping hailed deals worth more than U$64 billion. But he did not offer details of any new funding for the initiative.

At least 17 central government-owned firms, like China Railway Construction Corp and Mengniu Dairy, signed deals at the BRF. A joint communique issued at the conclusion of the summit said that leaders had agreed to project financing that respects global debt goals and promotes green growth.

In a separate statement, China signed a memorandum of understanding with various countries such as Italy, Peru, Barbados, Luxembourg, Peru and Jamaica. Data showed the total value of projects in the scheme stands at $3.67 trillion, spanning countries in Asia, Europe, Africa, Oceania and South America.

At the same time, Xi and other top Chinese officials repeatedly sought to reassure partners and potential participants that Beijing does not intend to saddle them with high debts and wants the initiative to benefit all parties involved.

Some partner nations have complained about the high cost of projects, while some western governments view it as a means to spread Chinese influence abroad, leaving poor countries with unsustainable debt. China vowed that it would establish a framework on debt sustainability to prevent and resolve debt risks as part of its efforts to allay such fears.

Amid the loosening tense with China, United States (US) economic growth accelerated by 3.2 percent in the first quarter, halted presumption about the recession. The US economy hiked from 2.2 percent in the last quarter of 2018.

This economic growth was supported by road infrastructure investment increase. It also triggered worries over US economy condition, as there are decline in household and private consumption.

US President Donald Trump said he was glad over the over expected growth. The US has done several actions to boost economic growth, such as tax cut for $1.5 trillion in December 2017.

In the country, Bank Indonesia (BI) widens its accommodative policy to encourage domestic demand, as an effort to boost economic growth. The central bank released six regulations to support domestic consumption.

It will increase the availability of liquidity and support financial market deepening through strengthening monetary operations strategies, encourage retail payment efficiency by expanding the national clearing system service, and encourage the supply side of the Domestic Non Deliverable Forward transaction, especially through simplifying the terms of the underlying transaction obligations.

Moreover, the central bank is going to encourage the implementation of providers of facilities for conducting transactions on the money market and foreign exchange market, develop the commercial securities market as an alternative short-term funding source by the corporation, and encourage the expansion of electrification of non-cash social assistance, village funds, transportation, and government financial operations.

Ahead of this week, Indonesia will announce the money circulation and inflation data. BI estimated the inflation rate in April 2019 around 2.7 percent. This value is sourced from the Price Monitoring Survey in the third week of April, which was 0.31 percent on a monthly basis.

Big announcement will come from the US as the Federal Open Market Committee (FOMC) members will vote to set the reference rate. FOMC will also give statement about the US monetary policy. At the same week, United Kingdom will also have interest rate decision, with the monetary policy meeting minutes.

While, European Union will announce its gross domestic product (GDP) and give their economic forecasts. Meanwhile, the UK and China will release  Manufacturing Purchasing Managers Index (PMI) data.

May you have a profitable week!

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