Indonesia’s economy stays on growth path in Q1 as
 price pressures looms 

  A historic rise in commodity prices and reopening of the economy from COVID-19 curbs helped Indonesia

  stay on a recovery path in the first quarter, but analysts say headwinds are growing from global monetary

  tightening and the war in Ukraine. 

  Southeast Asia’s largest economy grew 5.01% in January-March from a year earlier, a fourth straight

  quarter of expansion. That compared to 5.00% forecast by analysts in a Reuters poll and 5.02% growth in

  the October-December quarter. 

  A recovery in consumption, investment and exports underpinned growth while surging prices of global

  commodities  such as coal, palm oil and nickel, also contributed to record high trade surpluses for Indonesia,

  a major supplier of these resources. Indonesia posted $9.33 billion trade surplus in the first quarter. 

  COVID-19 restrictions imposed earlier in the year, which have now been lifted, led to a strong pick-up in

  economic activities and spending, including travel, Margo Yuwono, head of Indonesia’s statistics bureau, told

  a news conference. 

  Consumption, which accounts for more than half of GDP, grew 4.34% in the first quarter, up from 3.55% in the

  fourth quarter.

  Improved activity also led to a lower unemployment rate of 5.83% by February 2022, data showed, compared

  with 6.26% a year earlier. The rate was, however, still higher than the pre-pandemic level of 4.94%. 

  On a quarterly basis, however, economists highlighted that growth momentum had slowed and cited

  geopolitical concerns among other factors that could hamper growth. 

  “Several global risks that will affect the national economic recovery include geopolitical risks, China’s

  economic slowdown and rising global inflation that has prompted tightening of global monetary policy,”

  Josua Pardede, an economist at Bank Permata, said. 

  Bank Indonesia (BI), which has pledged to keep interest rates at record lows until it sees signs of pressure

  on core inflation, intends to review its plans to normalise monetary policy in May to June, and assess any

  risks to the inflation outlook if the government changes energy prices and subsidies. It had previously said

  interest rate levels would only be reviewed in the third quarter. 

  Faisal Rachman, Bank Mandiri economist, said that if inflation is not controlled and affects people’s

  purchasing power, it may force BI to raise rates sooner than projected. 

  Annual consumer prices in April rose 3.47% from a year earlier, the highest since 2017. The central bank aims

  to control inflation between 2%-4% this year. 

  Josua added that inflation could reach 4% if the government makes adjustment to some fuel prices and

  electricity tariffs. 

  Indonesia’s palm oil export ban, imposed from April 28 to control domestic prices of cooking oil “could hold

  back the recovery if it remains in place for a long time,” Capital Economics’ Gareth Leather said. Indonesia’s

  central bank last month lowered its economic growth outlook for the year to 4.5%-5.3%, from 4.7%-5.5%

  previously, citing slower global growth and disruptions to trade.  

  Source: Reuters

  US: Joe Biden hosts ASEAN leaders amid concerns over China 

  The White House has announced a cash injection to boost Southeast Asia's climate, maritime and public

  health infrastructure as ASEAN leaders discuss shared concerns over China's rise in the region. 

  US President Joe Biden on Friday announced the nomination of Yohannes Abraham as ambassador to the

  Association of Southeast Asian Nations (ASEAN) as he wrapped up talks in Washington with leaders of the

  10-country bloc. 

  Biden kicked off the summit for the ASEAN bloc by holding a dinner for the bloc's leaders at the White House

  on Thursday evening. 

  The first-ever meeting of the two-day ASEAN summit to be held in Washington comes as the US seeks to

  solidify ties with Southeast Asian countries as part of its indo-pacific strategy in response to China’s

  expansion.  

  Earlier on Friday, US Vice President Kamala Harris said that "the United States and ASEAN have shared a

  vision for this region, and together will guard against threats to international rules and norms," appearing to

  allude to Beijing's military presence in the South China Sea. 
 
 

  Ahead of the dinner, the White House pledged around $150 million (€144.3 million) in support for ASEAN

  countries with initiatives for clean energy and maritime security. 

  "I hope this meeting can build a momentum for the return of the US presence in the region," Indonesian

  President Joko Widodo told a forum of the US-ASEAN Business Council before heading to dinner at the

  White House. 

  What the $150 million package entails 

  The White House committed $60 million to new maritime initiatives, including the deployment o a Coast

  Guard vessel and personnel to fight crimes at sea. US officials said the funds would also be used to counter

  what the US describes as illegal fishing by China. 

  The White House said another $40 million would go towards clean energy initiatives and around $6 million 

  would go to accelerate digital development in the region. 

  It also said it was working with the private sector to raise funds of up to $2 billion. 

  By comparison, the White House earlier this week announced a $40 billion military and humanitarian

  package for Ukraine as it fights the Russian army. The modest sum also pales in comparison to China's deep

  ties in the region. 

  Biden is working on other initiatives to bolster economic cooperation in the region, like "Build Back Better

  World" infrastructure investment and an Indo-Pacific Economic Framework (IPEF). But few details have been 

  revealed about both plans. 

  What are ASEAN concerns over China? 

  China claims nearly all of the South China Sea and stands at odds with four other ASEAN members —

  Vietnam, Philippines, Brunei, and Malaysia — that claim parts of it. 

  While the US has stepped up cooperation with other countries in the Indo-Pacific on traditional security

  matters to counter China, ASEAN members have grown increasingly frustrated by a US delay in detailing

  plans for economic growth in the region since it quit a regional trade pact in 2017. 

  "The US should adopt a more active trade and investment agenda with ASEAN, which will benefit the US

  economically and strategically," Malaysian Prime Minister Ismail Sabri Yaakob said on Thursday. China is not

  a member of ASEAN but it is party, along with Japan, South Korea, Australia and New Zealand, to the world's

  largest trade deal with ASEAN members. 

  Biden to travel to Asia next week

  Reuters news agency reported that Biden is set to launch IPEF during his whirlwind visit to Asia next week. 

  Biden is set to travel to South Korea and Japan to meet their new leaders, his first trip to Asia as president of

  the US. 

  He is also set to meet with leaders of the so-called QUAD group — which comprises the US, Japan, India

  and Australia — that has intensified security and economic ties amid concerns over China's rise in the region. 

  Source: DW 

  President Jokowi meets Elon Musk at Spacex 

  President Joko Widodo (Jokowi) met with Spacex founder Elon Musk and was taken on a tour of the rocket

  production facility in Boca Chica, United States, on Saturday (14/5). 

  The Indonesian President arrived at the SpaceX Stargate building at 10.30 local time and was greeted

  personally by Mr. Musk. President Jokowi and Mr. Musk had a meeting before the tour.  

  Following the tour, the President said the visit was a follow up to the meeting between Mr. Musk and the

  Indonesian Coordinating Minister of Maritime Affairs and Investment Luhut Binsar Pandjaitan, which was

  done at the President’s behest. 

  “(It’s) the next step of my order to speak to ELon about investments, about technology, about innovation,

  and now I’m here and have met directly with Elon to discuss future cooperation,” the President said as quoted

  from an official statement from the Indonesian state secretariat. 

  Mr. Musk was said to be very interested in Indonesia’s future, saying that the country was very optimistic

  about its prospects and showed positive energy. 

  “I think Indonesia has major potential, and I think we in Tesla and SpaceX will look at various opportunities to

  work with Indonesia,” Mr. Musk said. 

  Furthermore, Elon expressed his interest to work with Indonesia because of the country’s potential in

  various fields. 

  “We will take a close look at the forms of cooperation possible, because again Indonesia has a lot of potential.

  In particular, Indonesia has large population, which continues to grow. This is good because we will need a lot

  of people in the future,” he said. 

  Accompanying President Jokowi in the visit were Coordinating Minister Pandjaitan, State Secretary Pratikno

  and Indonesian Ambassador to the US Rosan Roeslani.  

  Source: Antaranews