Macro Updates - Global IMF World Economic Outlook Oct 2014: Macro

Transcription

Macro Updates - Global IMF World Economic Outlook Oct 2014: Macro
Wednesday
October 8, 2014
Macro
Macro Updates - Global
IMF World Economic Outlook Oct 2014:
ID, Bright Spot, amid the Gloomy Outlook
IMF Downgraded GDP Growth Projection Chart—WEO Oct 14
GDP Growth Forecast Table
Region / Countries
Source: IMF, Woorisec Reseach
Jul Forecast
Oct Forecast
2014E
2015F
2014E
2015F
World
3.4%
4.0%
3.3%
3.8%
Advanced Economies
1.8%
2.4%
1.8%
2.3%
Emerging Markets
4.6%
5.2%
4.4%
5.0%
US
1.7%
3.0%
2.2%
3.1%
Euro Area
1.1%
1.5%
0.8%
1.3%
China
7.4%
7.1%
7.4%
7.1%
Source: IMF, Woorisec Reseach
On Tuesday (7/10), the IMF published their annual World Economic Outlook
(WEO) Report with a somewhat gloomy outlook. The IMF had downgraded
their 2015F global economic growth outlook, from the previous forecast at
4% on last July, down 20 bps to 3.8%. The figure however remain above the
forecasted 2014E growth at 3.3%. The downward growth revision averaging
at -0.02% for 2014E and -0.10% in 2015F (Specifically for World, Advanced
Economies, Emerging Markets and Developing Economies, US, Euro Area,
and China).
The IMF stated that raising growth in emerging and advanced economies
“must remain a priority,” in order to prevent a prolonged period of sluggish
growth, a trend IMF's Christine Lagarde called the “New Mediocre.” The IMF
medium term economic growth forecasts (2014E—2019F) are somewhat
stable for the next 5 years, with the exception of slight future downturns in
China and US (see the chart on the next page).
The IMF Publication:
World Economic Outlook—Oct 2014
Legacies, Clouds, Uncertainties
Source: IMF
Bagus Permadi
Research Analyst
[email protected]
The report underlined that some financial markets pose increased overheating risks from the current near zero interest environment such as the
one in the advanced economies. Other notable risks stem from the probability of worsening global geopolitical tensions. Stagnancy in the economic
growth for developed countries, as well declining economic growth potential
in the emerging market countries remain as major concerns in the medium
term horizon.
PT Woori Korindo Securities Indonesia — Macro Updates
Page 11
Snapshot from the IMF—WEO Oct 2014
Indonesia and the Emerging Market Region
The IMF views that the Emerging Market (EM) region is viewed to be right on
track for a higher economic growths after the period of cooling down in 2014
which partly due to political uncertainty in countries such as in India, Thailand, and Indonesia. The subsequent rebounds are expected to occur around
2015 mid-year. The Southeast Asia (SEA) region among other, is expected to
experienced a strong growth in 2014E-2015F, but the growth pace slow
down and stabilize at 5.5% in 2019F.
Among peers in the SEA, Indonesia stands out as the country with the biggest
economic growth potential. The IMG expected a growth range of 80bps from
5.2% in 2014E steadily grow to 6.0% in 2017F. This gives a strong signal about
how Indonesia high economic growth potential still being favored by the
global financial stakeholders.
IMF GDP Growth Forecast, 2014F-2015F
Source: IMF, Woorisec Research
US: Remain the Bright Spot
The strong US job data (Unemployment Rate dropped to 5.9% in OCt3), as
well as the recovery in the housing market turned the IMF to forecast a 2.2%
growth in 2014E (+50 bps from July), and 3.1% in 2015F (+10 bps from July).
The IMF also expecting the Fed interest hike take place around 2015 mid
year.
Euro Area
The Euro Zone is forecasted to experience a slower growth in 2015F, down 20bps to 1.3% compare to July's estimate. Inflation is one of the highlighted
issue that emphasize importance of the ECB asset purchasing program, the
IMF also warn European officials to push the Euro upwards.
Emerging Market and Developing Economies
The growth trend in the Emerging Market will remain slower than the post
global financial crisis in 2008 (gfc) due to the economic pressure along with
lacks of improvements. The IMF is expecting China’s economic growth to
slow down to 6.5% in 2016 from 7.4% this year after averaging nearly 10.5%
before the crisis. The slight contraction is also expected in 2015F at 7.1%
(down -30bps yoy).
PT Woori Korindo Securities Indonesia — Macro Updates
Page 22
Snapshot from the IMF—WEO Oct 2014
The Key Driver of Growth: Indonesia, SEA, and EM
The key driver of growth will remain underpinned by the bounce back of robust domestic consumption supported by the growing middle-class, favorable financial condition, strong labor market due to demographic dividend, as
well normalization from external foreign demand for the region export
goods, here again Indonesia as the 4th largest population in the world, and
large number of middle class again exceeded many of its peers. However all
of these growth potentials are overshadowed by global oil price volatility
spurred from the geopolitical tension which pose risks.
Consumer Price Growth Forecasts (for the whole Year)
Consumer Price Growth Forecasts (for the whole Year)
Source: IMF, Woorisec Reseach
Source: IMF, Woorisec Reseach
IMF and Indonesia’s Inflation Forecast:
Indonesian inflation estimate for the year 2014E and 2015F are at 6.0% and
6.7% respectively, above peers level, and the highest among EM countries.
Inflations are estimated to remain high in the upcoming years due to the
looming subsidized fuel price hike in order to free up some fiscal space in the
2015 state budget. The indirect inflation impact forecasted around 3.0%3.5% (higher than the direct inflation impact around 1.7%).
But if we compare on the inflation growth rate from 2014-2015 (for the
whole year inflation), Indonesia finish third after Malaysia, which inflation
expected to grow by 1.2% up to next year, Malaysia is followed by Singapore
at 1.1% expected inflation growth rate.
PT Woori Korindo Securities Indonesia — Macro Updates
Page 33
Disclaimer & Contacts
Research Team:
Reza Priyambada
[email protected]
Bagus Permadi
[email protected]
Agustini Hamid
[email protected]
Hendrik Panca
[email protected]
Raphon Prima
[email protected]
DISCLAIMER
This report, and any electronic access to it, is restricted to and intended only for clients of PT Woori Korindo Securities Indonesia
or a related entity to PT Woori Korindo Securities Indonesia. This document is for information only and for the use of the recipient. It is not to
be reproduced or copied or made available to others. Under no circumstances is it to be considered as an offer to sell or solicitation to buy
any security. Any recommendation contained in this report may not to be suitable for all investors. Moreover, although the information contained herein has been obtained from sources believed to be reliable, its accuracy, completeness and reliability cannot be guaranteed. We
expressly disclaim any responsibility or liability (express or implied) of P.T. Woori Korindo Securities Indonesia, its affiliated companies and
their respective employees and agents whatsoever and howsoever arising (including, without limitation for any claims, proceedings, action,
suits, losses, expenses, damages or costs) which may be brought against or suffered by any person as a results of acting in reliance upon the
whole or any part of the contents of this report and neither PT Woori Korindo Securities Indonesia, its affiliated companies or their respective
employees or agents accepts liability for any errors, omissions or misstatements, negligent or otherwise, in the report and any liability in
respect of the report or any inaccuracy therein or omission therefrom which might otherwise arise is hereby expresses disclaimed.
All rights reserved by PT Woori Korindo Securities Indonesia
PT. Woori Korindo Securities Indonesia
Member of Indonesia Stock Exchange
Head Office :
Wisma Korindo 7th Floor
Jl. M.T. Haryono Kav. 62
Pancoran, Jakarta 12780
Indonesia
Telp: +62 21 7976202
Fax : +62 21 7976206
Branch Office Pluit:
Jl. Pluit Kencana Raya
Blok O No. 79 B-C, Pluit Penjaringan
Jakarta 14450
Indonesia
Telp : +62 21 66675088
Fax : +62 21 66675092
Branch Office Solo :
Jl. Ronggowarsito No. 8
Kota Surakarta
Jawa Tengah 57111
Indonesia
Telp: +62 271 664763
Fax : +62 271 661623
A Member of NongHyup Financial Group
Seoul | New York | London | Hong Kong | Singapore | Shanghai | Beijing | Hanoi | Ho Chi Minh City |
Jakarta
PT Woori Korindo Securities Indonesia — Macro Updates
Page 44